D.C. Memo: Comcast Amps Up Mobile/Wireline Bundle with 5-Year Price Lock

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Comcast: For new customers first and then the entire incumbent user base later in the month, Comcast is rolling out an offer that looks like a major effort to turbocharge its plan to aggressively market a mobile/broadband bundle as competition stiffens. The plan includes a 5-year price lock for Xfinity Internet service starting at $55 a month that includes a gateway, no data caps, and no annual contract, “giving customers the freedom and flexibility to cancel at any time without penalty,” Comcast said. The five-year guarantee includes an unlimited Xfinity Mobile line at no cost for a year, Comcast said. “We’re addressing two significant consumer pain points – rising costs and transparency – with incredible value and easy-to-understand pricing that is locked in for five years,” said Steve Croney, Comcast’s Chief Operating Officer for Connectivity and Platforms. On Monday, Wells Fargo analyst Steven Cahall downgraded Comcast to Underweight from Equal Weight, cutting his price target to $31 from $37. Comcast shares closed yesterday at $34.74. Cahall was concerned about the financial impact of the pending free mobile line offer. Comcast reports first quarter results on April 24. UBS analyst John C. Hodulik was somewhat negative on the Comcast offer, saying it “will impact [Average Revenue Per User] ARPU growth going forward.” He also indicated the Comcast bundle would have an impact “at the margin” because of limited device promotions. Comcast’s press release said the company was “introducing the option to choose a five-year price guarantee when customers sign up for a new Xfinity Internet package.” A Comcast spokeswoman said, “The offer will be available to current customers later this month.”