Comcast reinforced its commitment to a wireless product last week after naming longtime executive Greg Butz to head up its new Comcast Mobile division, a unit that could be the next step in the cable company’s journey toward offering customers full mobility.
The move, part of broader changes including the departure of chief network officer John Schanz and cable division chief financial officer Cathy Avgiris (see sidebar), comes about eight months after Comcast notified Verizon Communications last October of its intention to activate its Mobile Virtual Network Operator agreement with the carrier.
The MVNO agreement, part of the deal by SpectrumCo (a consortium of Comcast, Time Warner Cable and Bright House Networks) to sell its wireless licenses to Verizon for $3.9 billion in 2012, would essentially allow Comcast to resell Verizon wireless service under its own brand name, a dramatic change from its past endeavors in the wireless business.
Comcast has been part of wireless partnerships that all went bust: Sprint PCS and Pivot with Sprint; and one with WiMax pioneer Clear-wire. An MVNO would allow Comcast to resell a reliable service with lower upfront costs.
Selecting Butz to head up the group was no accident. As executive VP of sales and marketing, Butz has been a key part of Comcast’s sales success, and past wireless endeavors have lacked a strong marketing component, according to some people familiar with the company.
“Selling to the base is going to be critical, and Greg [Butz] knows how to sell into Comcast’s customer base,” one source said.
Butz helped create Comcast’s broadband business in the early days of high-speed data, responsible for product strategy, business strategy and marketing. He also has a cellular business background, serving stints at Comcast Cellular and Bell Atlantic Mobile.
Comcast declined to comment on the Comcast Mobile unit, but sources familiar with the company said its formation is a logical next step in what may be a slow and steady process. Comcast Cable CEO Neil Smit has said publicly that the cable operator was in “test and learn” mode concerning its wireless plans, and that still appears to be the case.
“I expect Comcast to go about this pretty slow,” Pivotal Research Group CEO and senior media & communications analyst Jeff Wlodarczak said, adding that it could be one to two years before Comcast unveils a product.
While Comcast isn’t letting on what that could be, most analysts believe a hybrid WiFi-cellular phone could be first out of the gate — a mainly WiFifirst phone that hands off to the cellular network when the customer leaves a hotspot. It could give Comcast the ever-elusive quad play of video, wireline voice, data and wireless that operators have chased for decades.
The timing is better now than in the past, Wlodarczak said, for two reasons: Wireless pricing is high and wireless usage is off the charts.
Wlodarczak said offering a service over an already reliable wireless network at a cheaper price could gain traction. However, operators would have to be careful as to how low they go.
“If you really only need the MVNO as a fill-in — the tech is not quite there yet — you could seriously squeeze the telcos using their own network,” he said. “But this is the flaw with MVNOs; at some point the deal ends.”