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Comcast’s wireless future: buyer, seller or network operator?

IoT could be biggest opportunity, but not in the near term

Cable and media giant Comcast clearly intends to be a player in the market for wireless services. With tens of millions of Wi-Fi access points, an enterprise internet of things business, a mobile service offering on the Verizon network and a new set of low-band spectrum licenses, the company has some options.

Comcast could make a bid for Sprint or even T-Mobile US, or it could sell its spectrum to one of the wireless carriers. Now that the government’s 600 MHz auctions are over, Comcast is free to negotiate with other bidders. (The FCC’s rules prevented the companies from discussing mergers or takeovers during the spectrum auction.)

Alternatively, Comcast could try to operate its own wireless network. The company doesn’t currently have enough spectrum to launch a nationwide network, but in select markets it could purchase equipment, lease tower space and start operating its own network.

Alex Gellman, CEO and co-founder of tower owner Vertical Bridge, is hopeful that Comcast or will deploy a wireless network. He said Comcast probably needs to be in the wireless business because mobile devices are the preferred way for many people to consume video.

“This fundamental shift of video to the device really impacts Comcast’s business,” said Gellman. “I think Comcast is kind of being forced to formulate a wireless strategy.” He compared Comcast to T-Mobile US, which he said has resold other operators’ spectrum for years while it gradually acquired enough of its own spectrum to cover the entire country. “Over time I think they’ll deploy more and more of their own spectrum,” he said of Comcast.

Walt Piecyk, analyst at BTIG Research, has been urging investors to consider the possibility that Comcast will try to build its own LTE network.

“We believe Comcast could cover a substantial portion of the more than 125 million people that live within its cable footprint by deploying higher power LTE over licensed spectrum,” Piecyk wrote in a research note. “LTE radios are cheap and the cost of the new wireless networks are primarily driven by the labor of laying the fiber, an asset in which cable operators have already invested.”

So far, Comcast’s only wireless offering for consumers is a service that uses Verizon’s network. But the company has announced a wireless network of its own for connecting things rather than people.

The IoT opportunity
Comcast is trialing a internet of things networks in San Francisco and in its hometown of Philadelphia. The networks use Semtech’s LoRa technology to connect sensors and meters to the internet. Comcast said that if the initial trials are successful, it will deploy low-power wide area networks and services across its markets with the goal of completing commercial deployments by late this year or early next year.

According to analyst Joe Madden of Mobile Experts, the challenge for Comcast will be developing the right customer connections. Even though the company provides internet service to thousands of corporate customers, Madden doesn’t think Comcast has the right relationships in place just yet.

“They have little connection to industrial, automotive, smart city, or healthcare customers,” said Madden. “Any LoRa based network established by Comcast will be capable of handling these applications, but they will need to create new business-level connections to build a customer base.”

Comcast’s strong suit is the residential market, where the company provides cable and internet service to millions of customers nationwide. Here Comcast is also working to build an IoT business.

In March 2017 Comcast completed its acquisition of iControl Networks, a software company that enables service providers and home security companies to offer connected home solutions to households. iControl’s solutions include remote control and management for home security systems, energy management systems, and home health and elder monitoring solutions. iControl also has a community for application and device makers to partner on a common platform.

“Comcast has an advantage over many other companies for home automation and security applications, because Comcast is already providing Wi-Fi in the home for tens of millions of households,” said Madden. “We can expect to see set-top boxes with LoRa, Wi-Fi, and possibly other formats built in, to handle a variety of broadband and IoT applications.”

Security and energy management are priorities for corporate customers too, so Comcast may find a way to leverage iControl in the enterprise market. iControl’s technology is already embedded in the security systems used by a number of enterprise customers. In addition to Comcast’s Xfinity home security service, iControl’s technology powers the ADT Pulse service.

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