- Comcast’s new pricing strategy is a big step towards addressing price pains and subscriber woes, said analysts
- It also marks a step up in the operator’s convergence game, though Charter thus far is ahead of Comcast on that front
- We can expect to broadband/wireless bundles to further pick up this year, thanks to tariffs
As cable grapples with declining broadband subscribers and increased competition, Comcast unveiled a new pricing play that could turn the ship around for the industry, analysts told us.
The operator is now offering a five-year price guarantee for new broadband customers – a plan that starts at $55/month with no annual contract required. Customers who sign up for the price guarantee will have access to unlimited data plus they’re eligible for a free Xfinity mobile line for one year.
Steve Croney, Comcast’s COO of connectivity and platforms, said in the announcement Comcast is aiming to “[address] two significant consumer pain points – rising costs and transparency.”
Cable’s price pains
The move is a change long overdue for Comcast, according to analysts, as its existing pricing model has left the operator lacking in comparison to its competitors.
“If it’s a step in the direction of everyday low prices rather than big promotional discounts up front in exchange for big price increases a year or two later, then it is a big step in the right direction,” said MoffettNathanson’s Craig Moffett. “The industry has stuck with the old introductory discount model for far too long.”
Indeed, Comcast’s new pricing solves “some of the biggest complaints that customers have about cable,” Recon Analytics Principal Roger Entner told Fierce. “Exploding prices, data caps and an inferior router.”
Charter actually beat Comcast to it in terms of updating its pricing strategy. The operator in September rolled out new broadband bundles with higher starting speeds and guaranteed pricing for up to three years.
These pricing plays come as the Trump administration’s crackdown on immigration calls for slower household growth, which spells out bad news for cable operators trying to salvage their dwindling broadband subscriber numbers.
But now Comcast is poised to snag some customers from its fiber competitors, according to New Street Research. The operator is offering 1-gig for $65/month while most fiber providers offer the same for around $70 monthly, said NSR’s Vikash Harlalka in a Tuesday note.
All about convergence
Remember when Comcast said how it’s going to lean more into the wireless side of the business? With the mobile lines in the mix, the company’s pricing “comes out ahead of the converged fiber operators,” Harlalka noted.
“Most smaller fiber operators don’t even have a converged offer to compete against this offer from Comcast,” he said.
As buzzword-y as it sounds, the convergence of wireless and wireline networks has become a hot topic among the major operators. Though they have varying opinions of how far along the industry really is on that front.
For Comcast’s part, it has some catching up to do if it wants to match Charter in the convergence game. Charter “has really taken wireless execution to the next level and outperformed Comcast,” as Entner recently told us.
And with all the chaos surrounding tariffs, don’t be surprised if 2025 will see a further uptick in broadband and mobile bundling. Dell’Oro Group VP Jeff Heynen predicts bundling will “undoubtedly accelerate this year as telco and cable operators try to lock in subscribers early with aggressive pricing and incentives on mobile services.”