Following the news that Comcast is launching a portfolio of low-cost prepaid internet, mobile, and pay-TV services under the “NOW” brand umbrella in the US;

Charles Garrett, Principal Global Telecom Consumer Services Analyst at GlobalData, a leading data and analytics company, offers his view:

“With the fixed wireless access (FWA) challengers sucking up much of the oxygen in the US home internet space these days and the impending demise of the Affordable Connectivity Program (ACP) broadband subsidy credit looming large, Comcast’s decision to roll out a holistic prepaid connectivity proposition may be the definition of ‘opportunely timed.’ This is not only a riposte to the continued FWA incursion, but also a well-considered response to the increasing inevitability of the ACP broadband subsidy lapsing in the coming weeks.

“That said, framing Comcast’s NOW launch as simply a response to those market forces – significant though they may be – is to miss a substantial part of the thrust here. This is also an attempt by one of the sector heavyweights to broaden its addressable market without cannibalizing its existing base of bread-and-butter residential broadband customers. Moreover, Comcast is already a practiced hand at prepaid home internet and the NOW Mobile service should benefit from the same handsome offload margins as Xfinity Mobile. So, while entering a new space or launching a new brand always feels audacious, this also feels decidedly low-risk considering some of the strengths Comcast has to lean into here.

“Of course, the US is also a hypercompetitive space, spinning up brand awareness among the public does not necessarily happen in short order, and there are still loads of details left to sort out yet in these early days. The internet and mobile aspects of this portfolio are still in the trial phases, and it is yet to be seen exactly what shape the channel approach is going to take. And with the prepaid space often a testbed for app-driven service approaches, there is also the question of whether and how much Comcast may eventually bake on-the-fly customization into NOW subscribers’ digital service management.

“To be clear, though, beyond being the first operator in the US prepaid space to put together a prepaid portfolio spanning home internet, mobile, and pay-TV – not to mention those millions of WiFi access points Comcast has at its disposal – it is really Comcast’s entry into the wireless prepaid space which is entirely new here. And long term, that may be the real rub for NOW’s prospects: The US prepaid wireless space is not only incredibly volatile these days, with Verizon, AT&T, and Dish registering a combined 547,000 prepaid subscriber losses in Q4 2023, but the space itself is shrinking.  Those Q4 2023 results dovetail with GlobalData’s long-term projections for the space – i.e., a decline of over 4.5 million prepaid wireless subscribers in the US from end-2022 through 2028, according to its March 2024 US mobile broadband forecast. Consequently, while Comcast is wise to broaden its target market into the value-oriented offerings – and wiser still to do that at a moment when so many consumers are scrutinizing their monthly spend closer than ever – it is also jumping into a space that is contracting.”