If recent comments from a Comcast executive are any indication, the push that cable companies are making into the wireless space could help spark a price war for mobile broadband. Comcast in July launched two new service bundles that provide wired and wireless broadband in Portland, Ore., and Atlanta at prices lower than comparable offers from carriers. Steve Burke, Comcast’s COO, noted on the cable company’s second-quarter earnings call yesterday that margins on combined wired and wireless broadband packages reach in excess of 40 percent once introductory prices are phased out, which means Comcast has plenty of room to respond if carriers try to lower their prices below those offered by the company. And that, in turn, means consumers may see lower mobile broadband rates in the coming years — at least in areas where WiMAX service is deployed.
Comcast is offering two combo plans: a metro service that combines home broadband and WiMAX mobile broadband for $49.99 for 12 months (after which the price jumps to $72.95), and a nationwide service that combines cable broadband with WiMAX and Sprint’s 3G network for $69.99 for the first year (it then jumps to $92.95). Clearwire, which Comcast has an investment in, is providing the WiMAX service. Considering that Sprint charges people $60 a month for mobile broadband and Comcast charges about $42 a month for its lowest tier, this second option is a great deal for the first year, and still offers savings over the long term. Think of the fast WiMAX speeds for local mobile broadband as a nice bonus.
AT&T has a similar style of plan it calls Internet At Home and On the Go that charges users $60 a month for the minimum broadband connection and 200 MB of 3G service and $80 for the 5GB of 3G access with DSL access. Compare Comcast’s 12 Mbps download speeds at home with AT&T’s 1.5 Mbps speeds on its low-end DSL line, and the comparison favors Comcast even after the introductory price rises. Of course, some folks may decide to dump Comcast’s wired broadband line altogether and go with Clearwire’s $80-per-month plan for nationwide mobile broadband.
But subscribers are apparently seeing the value in Comcast’s service as Burke said that 40 percent of those signing up for it in Portland are new Comcast customers leaving DSL connections. Looks like WiMAX may help challenge the lock on mobile broadband pricing after all — at least in markets where consumers can buy it.
