Why the Media Industry May Continue to Tap into Wireless
Comcast’s move into the wireless business
On April 6, FierceCable reported that Comcast (CMCSA) had unveiled its foray into wireless services through Xfinity Mobile. According to the report, the service will use Comcast’s 16 million Wi-Fi hotspots and provide access to Verizon Communications’ (VZ) 4G LTE (long-term evolution) network.
The report also states that Comcast will offer both limited and unlimited data plans with the service and will bundle the mobile service only for its existing high-speed Internet service customers. According to the report, Comcast’s wireless service will not offer Wi-Fi calling and zero-rated videos. No zero-rating means that users will not be able to stream videos without affecting their data plans.
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Comcast has an MVNO (mobile virtual network operator) agreement with Verizon Communications (VZ) and Sprint (S). With the renewal of its 2011 agreement with Verizon, the company believes it could generate more value for its shareholders.
At the Deutsche Bank Media, Internet & Telecom Conference last month, Comcast noted that it wants its wireless business’s NPV (net present value) to be positive and for it to have a lower churn. It plans to achieve these objectives by providing its wireless services in a bundle, which will be available only in Comcast’s service area footprint at first.
Rise in video traffic
According to Cisco Systems’ (CSCO) VNI (visual networking index), at the end of 2015, video accounted for ~61% of mobile data traffic in the United States (SPY). By the end of 2020, analysts estimate that this figure could expand to ~77% of US mobile data traffic. Considering this scenario, more media companies could enter the wireless space.