Comcast 'must capture the imagination of the customer' to succeed in wireless, Kagan says

In its second attempt to enter the U.S. wireless business, Comcast (NASDAQ: CMCSA) faces a significantly greater challenge, says analyst Jeff Kagan.

Comcast acquired spectrum to enter the wireless business back in 2006. After watching Cox Communications take a serious stab at a buildout, Comcast retreated itself, joining Time Warner Cable and Bright House Networks in offloading spectrum to Verizon in 2011. That Verizon deal included the MVNO agreement on which Comcast has hoisted its current wireless plan.

"Things are different today compared with several years ago," Kagan said, writing for RCR Wireless News. "Back then the Apple iPhone and Google Android were still new and still in a rapid growth curve. Today, everyone who wants a smartphone, already has a smartphone. Today the smartphone market tries to win customers from competitors rather than trying to find the smaller number of newbies."

Attempts in recent years to challenge the market domination established by Verizon (NYSE: VZ), AT&T (NYSE: T), Sprint (NYSE: S) and T-Mobile US (NYSE:TMUS) have been unsuccessful, Kagan noted. 

"Even Google, which is one of the two most successful wireless players on the handset side with Android, is not making much of a dent. Perhaps the reason is they only offer their Nexus device. This is not a popular device. But for whatever reason they are not making an impact as a competitor as a service," he said.

"A few years ago, there were other newcomers trying to make it in wireless," Kagan added. "If you recall, Amazon Fire Phone was a flop. Facebook phone was disaster. And the cable television industry wireless effort including Comcast was a total zero."

With Comcast ramping up a mobile division, how can it succeed in its second bite at the wireless apple?

"This time they must capture the imagination of the customer," Kagan said. "They must offer a killer network with fast speeds and far reach. They must offer attractive devices that customers will want to buy. That means they must offer the hot devices like the Apple iPhone and Google Android like the Samsung Galaxy. That's the only path to possible success going forward."

Comcast, Kagan added, will likely work closely with Verizon in establishing its network.

"My educated guess is Comcast will eventually roll something out with new spectrum while working with Verizon Wireless since they don't know the wireless business at all and they don't want to fail again," he said. 

For more:
- read this RCR Wireless News story

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