With Cablevision Systems' launch of a WiFi-only phone service still fresh in everyone's mind, the topic of how WiFi-fueled services might fit into Comcast’s future was a hot one on the MSO’s fourth quarter earnings call Tuesday.
Comcast is keeping its future wireless plans under wraps, but executives did drop hints that the operator working on new strategies and product ideas that prefer WiFi connectivity and use cellular networks as a backup – a growing service category typically labeled as “WiFi-first.”
Comcast has already deployed about 8.3 million WiFi hotspots -- through a mix of rollouts in public venues, business locations and in home-side gateways – and has MVNO agreements with Verizon Wireless and Sprint that it has an option to pursue.
“We’re working on how we monetize that [WiFi] asset and bring it to market,” Neil Smit, president and CEO of Comcast Cable, said on the call. “We do believe in the asset and [are] working on ways on bringing it to market in the coming months.”
He said Comcast would make further announcements on its plans “when we have the product well-defined and developed.”
While not yet offering a service akin to Cablevision’s WiFi-only Freewheel offering or a WiFi-First products such as those marketed by companies such as Scratch Wireless and Republic Wireless, Comcast has already dipped its toes in the voice-over-WiFi waters with Voice 2go, a WiFi-based calling feature that’s part of the MSO’s Xfinity Connect app for smartphones and tablets. Voice 2go, launched in 2012, lets customers make and receive calls with via the app using their own home phone number.
Smit was later pressed about whether Comcast characterizes its wireless strategy as an attractive feature or something that could evolve into a new business.
Smit said Comcast could go either way, or take both vectors. “We’re assessing the business opportunity.”
Comcast is not at a point yet that it wants to be “too open about what our wireless plans are going forward,” Michael Angelakis, Comcast vice chairman and CFO, added later. “We are working through all of those issues and technologies internally.”
Comcast appears to be hiring in areas that could push those strategies forward. As reported by The Donohue Report last week, Comcast is hiring in areas aimed at mobilizing its triple-play bundles.
On the video front, Comcast plans to remain aggressive with its rollout of X1, an IP-capable platform that features a cloud-based navigation system that has shown to have a positive impact on VOD usage while also reducing voluntary churn levels. Comcast, which added 6,000 video subs in the fourth quarter of 2014, just completed year one of a three-year plan to have X1 deployed to a majority of its video subs.
Updating that progress, Angelakis said about half of Comcast's video connections in 2014 was for X1, adding that X1 now makes up about a quarter of Comcast’s base of triple-play customers.
Comcast’s expanded rollout of X1, its cloud DVR, wireless gateways, general infrastructure investments, its ongoing aggressiveness with business services, and the pursuit of new business lines such as Xfinity Home, will result in higher capex spending in 2015. The MSO said it expects cable capital expenditures to increase to about 14.5% of cable revenue in 2015, up from 13.9% of cable revenue in 2014.
Angelakis defended the anticipated increase, reasoning that Comcast is focusing it on offensive areas that focus on growth and provide good returns. “Not all capex is bad capex,” he said.