VZ Verizon Communications Inc

By Shalini Ramachandran and Ryan Knutson 

Comcast Corp. Chief Executive Brian Roberts said Tuesday the cable giant is aiming to launch a wireless service by mid-2017, creating a new line of business that could help the company better retain customers in a fiercely competitive market.

Speaking at the Goldman Sachs Communacopia investor conference Tuesday morning, Mr. Roberts said the product will take advantage of Comcast's 15 million Wi-Fi hot spots and use leased airwaves from Verizon Communications Inc. Comcast has a deal with Verizon dating back to 2011 that allows the cable company to sell wireless service using the telecom carrier's network at set terms and pricing.

Mr. Roberts said that because Comcast has a "good fair relationship" to sell on a wholesale basis, "we won't have to make the kind of investment" needed otherwise, such as cell towers and other infrastructure.

"We believe there will be a big payback with reduced churn, more stickiness and better satisfaction," Mr. Roberts said.

Mr. Roberts said Comcast will market the wireless service inside its existing footprint, to existing and potential Comcast cable customers, as opposed to nationwide. The company is interested in upselling customers to a bigger bundle of services.

Comcast has explored entering wireless for several years. For at least a year, the company has been seriously weighing its options, engaging in discussions with Verizon and testing potential services.

Comcast, like all U.S. cable companies, is increasingly leaning on its broadband business as the overall pay television business stagnates and consumers cut the cord or trade down to discounted packages. The cable behemoth is looking to tap into new revenue streams.

But it will be stepping into a competitive U.S. wireless market, which has four national players who already have more than 100% penetration in the U.S.--meaning there are more active cellphones in use than people in the U.S. As a result, wireless revenue growth is slowing and carriers are locked in a price war over a finite amount of existing subscribers.

Comcast will have some advantages -- it will essentially be reselling service from Verizon Wireless, which has consistently been ranked by independent network analysts as having the best network. Comcast also has its own extensive network of Wi-Fi hot spots, and if the company can successfully integrate those into its wireless service -- meaning customers could move seamlessly from a Wi-Fi hot spot to a cell tower for calls, texts and data -- Comcast could save on the amount of money it must pay Verizon.

Comcast's ability to bundle wireless service with cable TV and home broadband will also give it other advantages not easily matched by wireless carriers. T-Mobile and Sprint Corp. don't have home broadband or TV offers. Verizon has high-speed Fios, but its footprint is relatively small and the carrier has avoided aggressively bundling Fios with wireless. AT&T Inc. acquired DirecTV last year, giving it a huge foothold in video, but AT&T's home internet speeds are slow in much of its footprint due to a continued reliance on copper wires.

Write to Shalini Ramachandran at shalini.ramachandran@wsj.com and Ryan Knutson at ryan.knutson@wsj.com

(END) Dow Jones Newswires

September 20, 2016 11:23 ET (15:23 GMT)

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