Comcast’s Xfinity Pricing Has Major Criticism (Hi T-Mobile)
Comcast (CMCSA) – Get a free report Struggle whenever you face real competition. This is because the cable and internet giant enjoys a monopoly in most of its markets through deliberate design.
Back in the 1980s, every community wanted to have cable television, but that required a lot of expensive infrastructure. Comcast and other companies went to those cities and towns and offered to spend the money to get them cabled in exchange for exclusivity.
It was a devil’s bargain, but at the time it was the only way to get cable across the country and probably a deal most communities would have to make. There was no streaming cable because there was no internet yet, and phone-based DSL cable is still years away.
Comcast maintained a monopoly in many markets until technology developed that made protecting that exclusivity—at least in cable TV—impossible. With internet service, many societies still have only one choice for consumers but technology is slowly starting to give people more choices.
Satellite internet, even Elon Musk’s Starlink internet, isn’t price-competitive with traditional service, but 5G home internet offers a viable alternative. T-Mobile TMUS has made a huge boost in the home space with a bold deal that dramatically reduces Comcast’s prices, and the cable giant’s response is predictable.
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T-Mobile is making a big move into the internet
T-Mobile offers the internet via its 5G network while Comcast has a traditional wired system. This means that whether the phone company’s service works well enough for you will depend on where you live as much as the way the phone service works.
If you live somewhere with a strong signal, 5G should allow you to stream video, go to Zoon meetings, and use the Internet the way you expect it to. But because performance can vary, T-Mobile is giving customers 15 days to cancel their service and get a refund.
Aside from that, the Un-Carrier, as the company calls itself, offers a pretty straightforward pricing deal. The company charges new streaming customers $50 per month for internet service, a price you’re guaranteed as long as you maintain the service,
“We’re not like Big Cable – we’ll never raise the monthly price for home internet. Keep the price low at just $50 a month with auto-pay, plus no annual contracts or additional monthly fees,” the company shared on its website.
Comcast tries to answer T-Mobile
On the surface, Comcast’s deal looks pretty much the same. New home internet customers can get the service for $55 a month, as long as they use autopay. However, this is where the catch begins to appear.
Comcast offers a $10 auto-pay credit if you set up your payment to go out directly from your bank account. If you choose to use a credit or debit card (the way most people pay most bills), you only get a $5 credit, which brings the cost down to $5.
Asking for bank information, rather than accepting a credit or debit card, is an old gym trick designed to prevent people from actually canceling their membership when their card expires. It is something that is less customer friendly than just beneficial to the company.
However, that’s not the big catch for that, you have to take a look at Comcast’s fine print. While T-Mobile guarantees its price forever, Comcast’s $55 or $60 per month deal expires after one year, then automatically rises to $82 (or $87 if you auto-pay with a credit or debit card)—a nearly 50% increase.
T-Mobile took a huge market share in the phone space than AT&T and Verizon because those two companies used customer-unfriendly practices just like Comcast. It seems very likely — especially as the company builds out its 5G network — that the same thing will be repeated in the internet service space.