In May last year, Comcast launched Xfinity Mobile, a wireless service that runs on Verizon’s network. Although the cell plans were never designed for widespread appeal, as only Comcast cable or internet subscribers can sign up, Xfinity Mobile has nonetheless got off to a flying start.
In the seven months Xfinity Mobile has been available, the company has signed up 380,000 new customers. Considering the limits on subscribers — and the fact that Xfinity Mobile has mostly steered clear of they typical blockbuster deals networks offer to attract new customers — that’s an impressive start.
Analysts are certainly taking note. In a blog post, Walter Piecyk of BTIG said that “Comcast’s early wireless subscriber growth is certainly impressive,” although he also noted that it’s too early to call the results “conclusive.” In a best-case scenario, Piecyk sees Comcast adding a million subscribers in 2018, and Charter’s soon-to-be-launched service could scoop up another 500,000 to 750,000 subscribers. Those numbers represent a significant chunk of the 3 million post-paid lines that the industry adds per year.
But for the time being, the established players don’t seem to be worried. On T-Mobile’s earnings call last week, CEO John Legere had some choice words for the cable industry, as we’ve come to expect. “[Xfinity Mobile] is very irrelevant, and I would assume Charter will be irrelevant squared,” Legere said. “I would say the furthest thing from my mind is any concern about the impact of cable.”
“First of all, I think they’re incompetent and they don’t belong in wireless without having owner economics. 500 stores across the country, telling people in Manhattan your closest store is in Long Island is crazy. An MVNO that doesn’t work. Wi-Fi is not a way to play this game. And I think from a standpoint of their impact, I think their impact will be to grab customers sideways from the other big model. And so I mean, I think Verizon and Comcast are going to try to pick each other’s pockets. I mean, I think Verizon’s enthusiasm about doing their 5G tablet calls on at the Super Bowl are that they’re praying to have some sort of broadband access capability to the home to compete with a Comcast. So that — no, I don’t see any impact to us at all.”
Legere’s setting the stage for a fight between T-Mobile and the cable companies, two industries that are set to compete far more than usual in the coming years. Thanks to its expensive acquisition of Layer 3 last year, T-Mobile plans to launch an all-new TV service later this year, and during the initial announcement, Legere specifically called out big cable as T-Mobile’s next target.
The coming transition to 5G will also bring T-Mobile into increasing conflict with cable companies. Although T-Mobile has repeatedly said that it will roll out mobile 5G first, the faster speeds and higher capacity of a 5G network mean that for the first time, wireless internet will become a real rival to home broadband.