Comcast to Offer Pay-as-You-Go TV, Internet Service With No Credit Checks
July 21 2016 - 3:53PM
Dow Jones News
By Steven Perlberg
Comcast Corp. will roll out a new pay-as-you-go program that
lets consumers sign up for television and internet services for
seven or 30 days at a time, a blueprint used by the wireless
industry to attract low-income households.
Under the plan, called Xfinity Prepaid Services, customers will
pay a one-time equipment setup fee and can "refill" their service
without limitations on the number of times they can renew, Comcast
said. The service doesn't require a credit check or contract.
The cable giant will make the service available later this year
in Illinois, Michigan, Georgia, Florida and Indiana, with plans to
extend it to its entire customer base by the end of next year.
Comcast has signed an arrangement with Sprint's no-contract
wireless brand Boost Mobile to offer the prepaid services at its
4,400 locations within Comcast's footprint by the end of 2017.
Comcast declined to disclose the financial arrangement.
"We want to create an easy, pay-as-you-go option for people who
want more flexibility and predictability when buying our services,"
Marcien Jenckes, executive vice president of consumer services at
Comcast Cable, said in a statement.
Of the 20 million U.S. homes that don't pay for TV, 14 million
to 16 million can't pass the necessary credit check to receive
service, according to estimates from AT&T, which J.P. Morgan
analyst Philip Cusick highlighted in a recent note. Comcast's more
flexible service could appeal to such customers, who otherwise may
flock to over-the-top video services.
The new plan comes during an uncertain time for the future of
pay TV, as consumers cut the cord or opt for skinny TV packages and
streaming services. One question will be whether a prepaid service
runs the risk of encouraging consumers to cut the cord, knowing
they can sign up again for short windows to watch one-off events
like the NBA Finals.
"Certainly that is a possibility, but I don't think that is our
expectation," said Comcast spokesman Steven Restivo. While the
service is primarily geared toward "people making tough decisions"
on a monthly basis about finances, consumers with vacation homes
could use the prepaid option to toggle their cable on and off, Mr.
Restivo said.
Comcast's new offering could be appealing to consumers who just
want to be "in and out" for certain events, according to Jefferies
analyst Mike McCormack. But, he said, "it's probably more of a play
for the younger demographic that doesn't want to sign up for
full-time services."
The TV prepaid plan has two tiers. For a 45-channel plan,
customers pay an $80 setup fee for equipment and the first 30 days
of service. Then, they can pay $15 at any time to "refill" their
service for seven days, or $45 for 30 days. A 140-channel plan
costs $120 to start, with $30 and $90 "refills" for seven days and
30 days, respectively.
Comcast will charge $80 for the internet starter kit, with $15
for seven days or $45 for 30 days.
BTIG analyst Rich Greenfield said the plan provides a way to
grow Comcast's low-income subscriber base and is unlikely to get
people shifting from a regular plan to a prepaid plan. A new, more
flexible option may even create some goodwill for Comcast's brand.
"This seems like a very friendly way of appeasing regulators," Mr.
Greenfield said.
Comcast won't include prepaid customers when it reports its
subscriber numbers during quarterly earnings, Mr. Restivo said.
Write to Steven Perlberg at steven.perlberg@wsj.com
(END) Dow Jones Newswires
July 21, 2016 16:38 ET (20:38 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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