Comcast’s cellular brand, Xfinity Mobile, appears awfully well priced. Somehow, Xfinity Mobile offers service over Verizon’s extensive network without the usual price tag. Unlimited minutes and texts are included for free in all of Xfinity Mobile’s plans. Subscribers just pay for data, and rates for data are reasonable. For $45 per month, a subscriber can get unlimited data. Alternatively, subscribers can purchase a set amount of data and share it among up to five lines:
- 1GB data – $12 per month
- 3GB data – $30 per month
- 10GB data – $60 per month
A family could get five lines of service with 10GB of shared data, unlimited minutes, and unlimited texts for a base price of only $12 per line. Purchasing a comparable family plan from Verizon would be far more expensive. Even other mobile virtual network operators (MVNOs) that run over Verizon’s network charge far more for similar plans. Why is Xfinity Mobile so cheap?
(Added 5/17/2020: In the time since this post was published, Xfinity Mobile changed the 1GB option from $12 to $15 per month.)
Lock-in with other Xfinity services
Only customers with active Xfinity internet service are eligible to sign up for Xfinity Mobile. Some people who would have used internet service providers other than Xfinity may now choose Xfinity internet so that they can sign up for Xfinity Mobile. Similarly, potential fees incentivize Xfinity Mobile customers not to cancel other Xfinity services:
Competitors threaten Comcast. Like Comcast, Verizon’s Fios offers bundled TV, internet, and home phone service. Emerging technologies like 5G fixed wireless may create viable alternatives to conventional cable companies. By bundling several services together, Xfinity may make it more difficult for consumers to switch to competitors’ services.
Favorable MVNO terms
Xfinity Mobile is relatively new, but it already has a huge number of subscribers. While the agreements between MVNOs like Xfinity Mobile and host operators like Verizon are generally private, my impression is that MVNOs with large subscriber bases often receive substantially better rates than MVNOs with small subscriber bases. Xfinity Mobile may, in part, be able to offer low prices because it gets unusually good rates on access to Verizon’s network.
While Xfinity Mobile’s service is well-priced today, it’s not guaranteed to stay that way forever. We’ve already seen one revamp in Xfinity Mobile’s price structure.
I haven’t seen Comcast executives explicitly explain their rationale for launching a mobile service, so all I can do is speculate. If you have other thoughts about Xfinity Mobile’s pricing strategy, please leave a comment!