by Bill Snyder

Worst idea ever: Buying wireless service from Comcast

Jan 26, 2017
Consumer ElectronicsMobileSmall and Medium Business

Comcast makes its cable and broadband customers miserable, so why does it think it can score by selling wireless phone service?

I don’t need to use many words to describe Comcast’s customer service when one will do: awful. The cable giant has long been one of the most disliked companies in the country and its bad service is legendary. So what consumer in her or his right mind would opt to get wireless service from Comcast?

I’d say probably very few, but Comcast thinks otherwise. The cable giant confirmed yesterday what it has been hinting about for some time: It is going to launch wireless phone service later this year. In an earnings call announcing his company’s earnings, Comcast CEO Brian Roberts said he expects the new service will start to roll out in the middle of the year and the company will bundle it with its cable TV and broadband options.

The only reason Comcast can take the plunge so quickly is that it won’t be building its own wireless network. It will be reselling Verizon bandwidth. That’s actually a plus since Verizon has the strongest network of the four major wireless carriers.

But other than that, Comcast will be on its own. None of the major wireless carriers do a very good job taking care of customers. Indeed, pay TV providers and ISPs – and Comcast is both – typically score at the bottom of consumer satisfaction surveys as measured by the respected ACSI. Remember the infamous Comcast “customer service call from hell?”

To be fair, Comcast has improved a bit in a more recent ACSI survey, but as a press release announcing the results put it, Comcast and other pay TV services had “nowhere to go but up.”

It could be that the wireless service will be relatively inexpensive, since to compete with the existing carriers Comcast may have to offer steep discounts, industry consultant Chetan Sharma, told Bloomberg News.

Comcast plans to do what other wireless carriers do: sell smartphones directly to consumers and let them pay on an installment plan: “Our approach will be to purchase the phones and collect handset-related payments from our wireless customers over time,” Comcast CFO Michael Cavanaugh said.

Bad service but higher profits

Despite a long-term trend of people cutting the cord and ditching pay TV services in favor of streaming video, Comcast managed to add more than 80,000 cable subscribers and 385,000 broadband customers in the last quarter of 2016, the company said when it announced its financial results. That led to a more profitable quarter than Wall Street had expected.

How does a company scarf up new customers despite treating existing customers so poorly? Two reasons. In many parts of the country there’s not much competition among cable companies and ISPs.

And two of the existing competitors, AT&T and Verizon, have pretty much decided that DSL service isn’t profitable enough, so they have angered customers by letting their networks deteriorate and refusing to upgrade them to higher speeds.

With no place else to go, customers have turned to Comcast. My guess is that many of them won’t stick around once they get a taste of Comcast service. As to the wireless service, I’m obviously quite skeptical, but maybe Comcast will do a decent job and give the big four wireless carriers a bit more competition.