Comcast Announces MVNO/Wi-Fi Service
Move could come at the right time for offering a WiFi-first service that supports iPhones as well as Android devices.
At a Goldman Sachs investor conference yesterday, pay TV giant Comcast announced it will be entering the wireless business in mid-2017. Rather than building a wireless network from scratch, which would be a rather questionable undertaking at this stage of the game, Comcast will operate as a mobile network virtual operator (MVNO) reselling Verizon's service while augmenting that with its 15 million Wi-Fi hotspots.
This is yet another sign of the shifting landscape we see for network operators of all stripes. The U.S. cellular market has now reached the point of oversaturation, with the number of cellular lines exceeding population size. And, with the growing use of mobile, more people are cutting the cord.
The trend first impacted the local telcos, but it is now affecting the cable telephony business and, to a lesser extent, cable TV operations. Analysts put the shrinkage rate at around 1% per year, as discussed in a recent Economist article on the future of TV. Customers are dropping their 200-channel cable packages and opting for Amazon, YouTube, Netflix, Hulu, and other Internet TV options that may soon carry broadcast TV as well.
In short, Comcast is getting squeezed, and wants a shot at a market that is only slightly less competitive than the one it's in today.
Action in the WiFi-First Game
Up until now, WiFi-first or WiFi-only telephone services have had limited success, as I've previously discussed on No Jitter. Google made a big splash when it announced MVNO deals with Sprint and T-Mobile in January 2015 and launched WiFi-first service under the name Project Fi in April of that year. The MVNO cellular service operates in conjunction with Wi-Fi hotspots much in the same way in which Comcast is proposing. The basic service is $20 per month for unlimited talk and text, and data service is $10 per gigabyte, but Google provides a credit for any unused data, so it's effectively $1 per GB.
Of course, as I've discussed previously, Comcast and Google won't be the only players in the WiFi-first or WiFi-only game. Republic Wireless has an unlimited talk, text, and Wi-Fi data plan for $15 per month, and an extra $5 per month will get you 1 GB of cellular data. Scratch Wireless charges $69 per year to have access to the Sprint cellular network, and you get unlimited free text messaging (Wi-Fi and Cellular) and unlimited free Wi-Fi calling. On top of that you can buy "passes" for specified amounts of cellular voice or data usage.
My local cable TV company, Cablevision, launched a WiFi-only mobile voice and data service called Freewheel in January of 2015. It priced the service at $9.95 per month for its cable TV customers, and $29.95 per month for everyone else. The service disappeared some 18 months later, when Cablevision agreed to be taken over by Dutch telecom giant Altice in a deal worth $17.7 billion.
Pivoting on an API
One difficulty that continues to dog these services is that they can only support certain models of Android smartphones due to the development effort involved in building support for Wi-Fi-first calling . Project Fi, for example, supports the Nexus 6P at a starting price of $499 or the Nexus 5X for a starting price of $199. The open nature of the Android operating system means developers have to build an interface that uses a particular device's native dialer so users can make and receive calls just like they do on any other cell phone and without the need for an annoying separate calling app.
Comcast's announcement comes on the heels of Apple's introduction of the CallKit API in iOS 10, which opens up access to the iPhone's native dialer and could trigger a turning point here (see related post, "Cisco Missing the Mark on iOS Calling?"). Apple considers the CallKit API primarily for allowing use of the native dialer with VoIP services like Skype, while it continues to support Wi-Fi voice capability controllable through the Settings menu. So we will have to see if CallKit API has all the hooks developers need to make these Wi-Fi first services work natively on an iPhone.
In the meantime, Comcast has not disclosed what types of devices it will support, but my guess is the service will launch on selected Android phones just like the others. However, if the iPhone is on that list, that could be a whole new ballgame.
It's no secret that users are far more interested in the mobile device than in the service provider (assuming the service is not a total disaster). While Strategy Analytics put Apple's worldwide market share at 16% to over 80% for Android, comScore, which tracks the U.S. market, has Apple's share at 43% to Android's 53%. So the big question will be whether Comcast can make Wi-Fi first work on the iPhone. If not, 43% of the market is not going to be reachable, because Apple customers clearly aren't buying on price.
Hopefully the company recognizes what's at stake here, because iPhone support could be the difference between sinking and swimming.