Comcast might piggyback on Verizon's network to offer wireless phone, data service
Comcast Corp. and other cable companies may operate wireless phone and data service over Verizon Communications Inc.'s network, giving them a quad-play of TV, high-speed Internet, landline phone, and wireless data services.
Comcast Corp. and other cable companies may operate wireless phone and data service over Verizon Communications Inc.'s network, giving them a quad-play of TV, high-speed Internet, landline phone, and wireless data services.
Fast-growing wireless is one consumer telecom service that cable companies don't typically offer, a competitive disadvantage with the proliferation of mobile video and smartphones.
Verizon chief financial officer Fran Shammo disclosed in an earnings conference call this week that cable companies told the wireless giant that they would exercise an option to operate a "mobile virtual network" on Verizon Wireless - which means, in effect, that they will purchase wholesale capacity on Verizon's cell towers and partly compete with Verizon itself.
Industry sources confirmed that one of those cable companies was Philadelphia-based Comcast. Comcast spokesman John Demming declined Thursday to comment on its plans with Verizon.
Analyst Craig Moffett, who runs equity research firm Moffett Research LLC and is a highly regarded expert on the telecom industry, said Comcast's exercise of the option "is likely the first domino" in a series of actions that could include Comcast bidding on wireless spectrum in 2016, or later purchasing a wireless carrier.
A separate Wall Street analyst, who asked not to be identify because he wasn't authorized to speak on the topic, said Comcast appeared to be intent on developing a wireless service similar to what London-based Liberty Global is doing in Europe.
Liberty Global's biggest shareholder is U.S. cable pioneer John Malone, who has a 25 percent voting stake in the company.
Liberty Global combines WiFi hotspots with a traditional mobile-phone network to offer wireless services.
Over the last several years, Comcast has installed almost 11 million WiFi hotspots - mostly WiFi routers with a public channel in subscribers' homes or in public locations such as parks and train stations - in the United States.
This base of WiFi capacity could cut down on wholesale costs related to using Verizon Wireless's network, the analyst said.
The cable companies negotiated the option to piggyback on Verizon Wireless's network when they sold cable-controlled wireless spectrum to Verizon in 2011.
Time Warner Cable and Bright House Networks co-owned the wireless spectrum with Comcast and could be part of the virtual mobile network.
Acquisition speculation has linked Comcast to purchasing T-Mobile or Sprint, the nation's No. 3 and 4 wireless phone and data carriers. Comcast has said it was not interested.
Comcast also invested heavily in Clearwire, a national wireless service that didn't live up to its hype. Comcast sold its stake in Clearwire in late 2012.
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