T-Mobile CEO John Legere earlier this month predicted cable will fail marvelously with their MVNO adventures in the wireless space. But it looks like Comcast is ready for a learning experience.
During the company’s Thursday earnings call, Comcast CEO Brian Roberts said the company isn’t rushing into things guns blazing but instead will “be measured in our rollout, learning and adapting along the way.”
“I would characterize our efforts and approach in the following way. One, we plan to include wireless in our multiproduct bundles in a way that is designed to add value to our customers, improve retention, and ultimately benefit lifetime customer economics for us. Our offering will give customers access to a world-class wireless network benefiting from our Wi-Fi with the best mobile devices and a simple transparent experience, all for a great value.” Roberts said. “Two, we will be disciplined with our investment and expect to be NPV positive on each incremental customer once we’ve achieved a limited initial scale.”
Roberts said Comcast has a “good” relationship with MVNO partner Verizon, and said Comcast is hoping the setup is sustainable. The goal of the business, he said, is to boost bundling among customers looking to save and help reduce churn.
According to Comcast CFO Mike Cavanagh the company is going to take up a device payment plan scheme to provide handsets to its customers, purchasing the devices up front and collecting handset payments from wireless subscribers over time. Cavanagh said while the setup will impact the timing of Comcast’s free cash flow recognition, it’s not expected to impact broader company capital allocation plans.
From the wireless initiative overall in 2017, Cavanagh said the corporate and other segment of Comcast’s reporting – where wireless will be included following its launch – may see an “additional $200 million to $300 million drag over the approximately $900 million of negative OCF in 2016.”
Comcast is still expecting to launch its wireless service in mid-2017, but declined to provide details around where the service will initially launch.
