Cable MVNOs introduced more competitive unlimited plan pricing this year, but the National Advertising Division has told Comcast’s Xfinity Mobile not so fast on certain ad claims for 5G unlimited plans.
NAD recommended Comcast stop advertising plans as “unlimited 5G” and using messages that it has the “best price” for 5G plans. The decision came after a series of Xfinity Mobile advertising claims were challenged by T-Mobile.
Specifically, NAD determined that Comcast shouldn’t use the term “unlimited 5G” because speeds are reduced to 3G after a 20GB data threshold. NAD, an organization that helps resolve advertising industry conflicts through a self-regulated process, said speed reductions contradicted the specific “unlimited 5G” message to consumers, so couldn’t be fixed by disclosures Comcast sometimes used in ads.
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In a recent deep dive on carrier mobile pricing, analysts at MoffettNathanson took note of cable MVNOs' (with Charter and Comcast both riding on Verizon’s network) throttled speeds.
“After 20 GBs, Comcast’s Xfinity Mobile service is actually throttled, to a maximum download speed of 1.5 Mbps,” wrote analyst Craig Moffett in a December 8 research note to investors. The firm noted Charter’s Spectrum Mobile service is also throttled for unlimited plan subscribers after 20GB to 600 kbps maximum downloads. “This is obviously a much more aggressive limitation than a simple de-prioritization,” the firm continued.
However, the report still pointed out that cable has more efficient offload onto Wi-Fi that translates to below average mobile data use, so it’s unclear how many customers actually exceed the full 20GB threshold.
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As for advertising, a string of Comcast’s “best price” claims also were challenged by T-Mobile and didn’t pass scrutiny from NAD. They relate to Xfinity Mobile unlimited family plans that cost $30 per month, per line with four lines. NAD said ads (like get the best price for "unlimited 5G” and “Switch to Xfinity Mobile and get the best price for Unlimited”) conveyed an unfounded message that Xfinity Mobile plans were cheaper than competitors’ four-line plans on the market at the time – specifically noting a T-Mobile promo offer for $25 per line on its Essential plans.
That said, NAD acknowledged Comcast could use tweaked messaging in the future that clarifies its pricing is the best when compared to other non-promotional rates.
“NAD noted that the evidence in the record may support more qualified, unsurpassed price comparison claims that make clear that the comparison excludes temporary promotional pricing,” the organization stated in its recommendations.
Comcast could also make more limited best pricing claims in the future alongside changes in the pricing market.
Comcast in an advertiser’s statement said it would follow NAD’s recommendations and also “agrees that an appropriate disclosure can make clear to consumers the basis of comparison (including comparisons which exclude temporary promotional pricing) and will comply with NAD’s recommendation in future advertising.”
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While cable doesn’t compete with the major carriers on premium unlimited plans, they come into play for entry-level unlimited. An in-depth pricing analysis of the major carriers by MoffettNathanson also highlighted and compared changes brought by cable for entry-level unlimited plans(more on the analysis between AT&T, T-Mobile and Verizon here).
“A clear change in narrative this year was that Cable wireless unlimited offers, which were uniformly priced at $45 per line at the beginning of the year, have become competitive with, and even undercut, the incumbent offers at the low end,” wrote Moffett.
The research took into consideration a variety of factors but noted that at a headline price level, Comcast and Charter’s wireless offerings were cheaper than Verizon and AT&T on all plan sizes except those with more than five lines.
Comcast began offering its family unlimited plans at $30 per month per line in April, and Charter followed with its own $29.99 unlimited plan pricing per line for families in October.
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Looking at the net two-year cost for one-line entry level plans for switchers across the major carriers and cable, Moffett estimates show Comcast came out as the cheapest while T-Mobile was the least attractive but close to Verizon and AT&T.
“Despite significant subsidies offered, especially from AT&T and Verizon, the incumbents cannot offer enough value to overcome the low headline prices of Cable wireless,” said Moffett. “Xfinity Mobile unlimited plans, after accounting for bundle discount allocation and phone subsidies, have a net 2-year cost of $890, or $37 per month.”
Comparatively, the firm’s estimates for T-Mobile’s net 2-year cost for switchers getting a new phone on an equipment installment plan with one line came out to $1,306 or $54 per month.
Cable similarly came out on top for those that bring their own devices (BYOD) for one-line entry-level plans. MoffettNathanson estimated a net two-year cost of $1,065 or $44 per month for Xfinity Mobile BYOD switchers, compared to T-Mobile at $1,506 for BYOD switchers or $63 per month (Verizon was one dollar higher at $1,507).
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However, Moffett said once three or more lines come into play cable is no longer competitive for switchers that also need to upgrade their device, while T-Mobile starts to shine as it hawks a free third line and can offer phone subsidies.
“The aggressive phone promotions from the incumbents more than offset their higher prices,” the firm concluded. MoffettNathonson estimated the net 2-year cost per line for three entry-level lines when switchers need to upgrade their phone at $656 for Xfinity Mobile or $27 per month, compared to $504 (or $21 per month) for T-Mobile and $497 ($20 per month) for Verizon.
In the third quarter Comcast’s Xfinity Mobile reported 285,000 net additions and ended the quarter with 3.67 million mobile subscribers.