Comcast’s mobile service business, Xfinity Mobile incurred huge losses as the company lost around 1.2 billion USD for the first 18 months of its service. The company launched its service against competitors like AT&T, Verizon Communications, Sprint, and T-Mobile.
But, now the largest cable/Internet service provider in the nation will receive financial help to assuage some of its pains.
Nations No. 2 Internet/cable service company, Charter Communications Corporation has provided its consent to partner with Comcast, wherein Charter will fund 50 percent of the behind-the-scenes software and logistics for the smartphone business in a way that it will also be able to use the same software for its upcoming Spectrum service. Charter Communications might launch its new service this summer, which, to great extent, is based on Comcast’s model.
As per the company’s officials, the funding by Charter will help finance Xfinity Mobile’s Philadelphia software development team. However, Comcast didn’t disclose the size of the development team and the amount of the funding.
Charter and Comcast will separately market and advertise their mobile services, and will separately negotiate with smartphone manufacturers like Samsung and Apple. However, both the companies will utilize the same software platform that manages the plans, orders the phones and handle the warehouse logistics and billing. Also, the software would work as an interface between the Internet/cable companies and wireless network operators. Both Charter and Comcast would lease wireless spectrum from Verizon Wireless to provide their smartphone service.
Comcast has been working to develop to develop the software for more than a year. And, the company launched its Xfinity Mobile service in around mid-2017. Charter will provide an initial payment after the partnership to cover the costs that Comcast has already incurred through software development program. Afterward, both Comcast and Charter will be funding 50-50 in accordance with the partnership for the development. As per Comcast’s earnings statement for the first quarter, the company has added almost 200,000 new subscribers in the first quarter and has to bear a loss of 189 million USD in the business. According to some Comcast executives, the Xfinity Mobile business will be profitable once the business gets expanded.
The mobile wireless business is quite competitive as well as expensive to make an entry for new companies. And, in a recent announcement made by nation’s No. 3 and No. 4 mobile wireless service carriers – T-Mobile and Sprint – have agreed to merge.
Wireless service regulator authorities are expected to probe the deal for potential harm to consumers. In this regard, T-Mobile and Sprint noted the rise of new competitors in the wireless business, such as Comcast and Charter.
Moreover, Comcast-Charter partnership will be controlled and managed by a four-member board that will consist of two people from Charter and the other two from Comcast.