Comcast partners with Asian carriers, eyes mobile market

Sun May 11, 2014 5:06pm EDT
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By Liana B. Baker

NEW YORK (Reuters) - Comcast Corp is offering at least two Asian cellular operators access to its WiFi hot spots in the United States, in trial partnerships that illustrate the cable company's ambitions to compete with U.S. wireless carriers.

The deals with Japan's KDDI and Taiwan Mobile allow their subscribers to use Comcast's WiFi hot spots when they travel to the United States, reducing the international roaming charges that they would otherwise have to pay, according to a Comcast spokesman.

Comcast has been steadily building out its WiFi network and said last week that it aims to have 8 million hot spots by the end of the year, covering 19 of the 30 largest U.S. cities. The No. 1 U.S. cable company is also seeking U.S. regulatory approval to buy Time Warner Cable Inc, which now has 34,000 WiFi hot spots.

If the merger is approved, the combined company would have a nationwide footprint that could potentially challenge the dominance of U.S. telecom giants Verizon Communications Inc and AT&T Inc, an idea that Comcast floated in an April 8 regulatory filing touting the deal's benefits.

Since that filing, investors have been trying to figure out what Comcast and other cable companies might be planning do in the mobile market. The topic came up frequently in the latest round of quarterly earnings calls.

Cable is "well positioned to enter the wireless voice and data market with costs that are lower than those of existing wireless carriers," New Street Research analyst Jonathan Chaplin said. "This could be truly disruptive, with grave implications for new entrants and established wireless carriers alike."

Comcast has adopted a more cautious tone. "We view WiFi and cellular as complementary. There are many different situations and applications where consumers may prefer one or the other," said Tom Nagel, Comcast's senior vice president and general manager of wireless services.

Comcast has not disclosed how much it is charging KDDI and Taiwan Mobile in these deals, which were signed earlier this year. The amounts are thought to be small since WiFi data fees are typically much lower than wireless data charges.   Continued...

A Comcast sign is shown on the entrance to its store in San Francisco, California February 13, 2014. REUTERS/Robert Galbraith