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Wal-Mart switches TV suppliers to back Comcast

Satellites downed

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In a move that will suddenly set back the US satellite community, Wal-Mart has decided to go into business selling Comcast services including its full suite of triple play services, cable TV, broadband and telephony.

The deal was announced this week by Comcast, and jaws must have dropped at DirecTV, where Wal-Mart has been a key component in selling its satellite TV services. It is unclear if Wal-Mart will continue selling the DirecTV service once the Comcast deal starts to roll. Comcast's triple-play will be offered in Wal-Mart "Connection Centers," in 500 Wal-Mart locations right across Comcast's national footprint. The deal is due to start any day, and will later include wireless, and audio services.

The deal could overnight turn the fortunes of Comcast which has had its subscription numbers frozen at 21.5 million for the past four years, while the satellite DirecTV service has risen from 11 million to 14 million over the same time.

Comcast services will be put in front of the 140 million consumers which visit Wal-Mart stores every week. Wal-Mart shoppers will be offered a single broadband kit with a Motorola modem and Comcast's self-install kit for $59.97. Comcast services are already sold by Best Buy, Circuit City Stores, RadioShack, Office Depot and Staples.

At a separate announcement Comcast CEO Brian Roberts said Comcast was on track to have 1 million VoIP customers by the end of the year and as many as 8 million within three to five years. Comcast has really only just begun selling VoIP services, having offered switched telephony services unsuccessfully for many years.

Roberts threw this into a speech he was giving at the cable TV industry's annual National Show in Atlanta and he also declared that soon Comcast would be offering wireless in competition with the major US cellular businesses Verizon and AT&T. "In the next couple of years it's going to be a big thing to have wireless in our offerings."

Next year, Comcast will focus on selling wireless phone service to its 21.4 million customers after trying it in a few cities later this year, Roberts said. Comcast is sticking to a plan to sell phone service as part of a bundle of products, in 30 US cities this year.

Copyright © 2006, Faultline

Faultline is published by Rethink Research, a London-based publishing and consulting firm. This weekly newsletter is an assessment of the impact of the week's events in the world of digital media. Faultline is where media meets technology. Subscription details here.

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