Comcast’s wireless business is doing better than expected

Comcast Xfinity store in Denver
Comcast sells Xfinity Mobile services through its chain of retail stores, as well as online. (Mike Dano/FierceWireless)

Comcast reported today that it added 196,000 new subscribers to its Xfinity Mobile MVNO service during the first quarter, bringing its total customer base to 577,000. The figures are slightly ahead of most Wall Street analyst expectations.

Indeed, the analysts at MoffettNathanson wrote that most analysts had expected Comcast to add around 150,000 new wireless customers during the first quarter of this year. The firm itself had predicted that Comcast would add 187,000 new customers.

However, Comcast reported a $189 million loss in the quarter related to its Xfinity Mobile expenses, which the analysts said was more than they expected. Indeed, the cable company’s mobile efforts may be dragging at Comcast’s overall earnings: Comcast’s EBITDA of $7.2 billion “missed our estimates by 3% on higher corporate spending, likely related to xFinity Wireless,” noted the analysts at Oppenheimer in a report to investors today.

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Comcast, for its part, has argued that its Xfinity Mobile business is geared toward drawing in new customers and keeping existing customers from going elsewhere for their telecommunication needs.

"I think we're off to a really good start with mobile,” Dave Watson, CEO of Comcast Cable, said this morning during the company’s quarterly conference call with analysts. “But it just launched last May, and it's still early in terms of how we expand distribution. We're just now beginning to package mobile solutions with broadband.”

Watson also pointed to Comcast’s new mobile agreement with Charter to jointly develop and use a common operating platform for their respective MVNO-based mobile services. Watson explained that the deal will help Comcast shave expenses from its mobile business.

"Given the amount of alignment in terms of how we both look at the business, it's a logical step,” Watson said of the Charter partnership. “We're both focused on back office operations, reducing costs and being efficient.”

Comcast’s Xfinity Mobile MVNO is a closely watched business in the wireless industry because it represents the first real efforts by the nation’s cable operators to cut into a market dominated by the likes of T-Mobile, Verizon and AT&T. Indeed, Charter is expected to launch its own Spectrum Mobile MVNO operation this summer, while Altice has said it will launch its own mobile offering next year.

Of course, Verizon is powering the Xfinity Mobile service and will power Charter’s Spectrum Mobile service. Verizon CFO Matt Ellis said this week during the carrier’s own earnings conference call with analysts that network usage from Comcast's Xfinity Mobile has "pretty much been as expected in terms of the volumes." Ellis also said Verizon remains pleased with its agreement to power Comcast's MVNO and Charter's forthcoming Spectrum Mobile MVNO.

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