Comcast Corp., the nation’s biggest cable company, plans to sell prepaid TV and Internet service to customers without requiring them to go through a credit check or sign a contract, waiving restrictions in an effort to sign up more subscribers.
The new “pay-as-you-go” service will let customers sign up for service for seven or 30 days at a time after paying a one-time fee for equipment, according to a statement Thursday. Comcast will introduce the service later this year in five states -- Illinois, Michigan, Georgia, Florida and Indiana -- and across its entire footprint by end of 2017.
“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 for consumer services at Comcast Cable, said in the statement.
With the change, Comcast could attract new subscribers at a time when growth in the pay-TV business has slowed. Normally, Comcast requires customers go through a credit check, pay a deposit and show proper identification. That leaves out potential subscribers who have poor credit, lack documentation or don’t have bank accounts.
Almost 10 million U.S. households are “unbanked,” or don’t have a savings or checking account, according to 2014 data from the FDIC. An additional 24 million households are “underbanked,” or rely on check-cashing services, money orders or payday loans. Comcast, which covers about one-fifth of the country, see both groups as potential new customers.
The Philadelphia-based company’s plan is similar to a strategy used by the wireless industry to reach lower-income customers. Comcast also announced it has signed a deal with Boost Mobile, which sells wireless service without a contract, to offer prepaid Comcast TV and Internet service at select Boost Mobile locations later this year and at all 4,400 Boost Mobile locations within Comcast’s service area by the end of next year.
For now, Comcast said its prepaid customers will not be included when the company reports its customer totals in its quarterly earnings.