NEW YORK – Comcast Corp on Thursday unveiled a wireless service with an unlimited data plan, making it the first major U.S. cable provider to enter the highly competitive wireless market.
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Unlimited data, talk and text will be available by mid-year for $65 per line for up to five lines, or $45 per line for customers with Comcast's top X1 packages, which bundle TV, internet and phone services, the company said.
U.S. wireless carriers Verizon Communications Inc , AT&T Inc , T-Mobile US Inc and Sprint Corp have recently offered unlimited monthly plans ranging from $50 to $90 for a single line.
The details released on Thursday removed some uncertainty in the market on how Comcast would price and roll out its service, dubbed Xfinity Mobile. Comcast shares closed 2.1 percent higher at $38.13.
Comcast is moving into wireless as cable companies seek to add more services to reduce customer churn, or attrition, as younger viewers shun high-priced subscriptions in favor of cheaper online options.
Rival cable provider Charter Communications Inc plans to launch a wireless service in 2018.
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Comcast's service will launch on Verizon's airwaves as part of a 2011 agreement between the two companies. It will allow customers to switch automatically to Comcast's Wi-Fi hotspots from 4G LTE.
Comcast will limit the service's rollout to customers within its footprint, which includes major markets like Philadelphia and Chicago. It will initially be available only to subscribers with Xfinity broadband service.
Comcast had roughly 25 million high-speed Internet customers in 2016, according to a filing.
It did not state its investment in Xfinity Mobile or the expected return. Chief Financial Officer Mike Cavanagh said in a meeting with analysts on Thursday that the service would be cash flow positive over time.
Analysts at JPMorgan wrote in January that building a wireless business could cost Comcast hundreds of millions of dollars annually in the first few years, potentially cutting as much as 5 cents to 10 cents off earnings per share in 2017.
Jonathan Chaplin, an analyst at New Street Research, said in a note earlier this week that Comcast's agreement with Verizon was merely a way to enter the market.
"Comcast will secure far better economics in wireless in time, either through a network sharing arrangement with or an acquisition of one or more carriers," he said.
(Reporting by Anjali Athavaley; Editing by Dan Grebler and Richard Chang)