Comcast Will Win With Phone Service

You'd think that Comcast (CMCSA - commentary - Cramer's Take) wouldn't bother with phones given the way the press handicaps the issue. For two years now, all you have read about is how the phone companies are building out their lines to handle video-on-demand or making big deals with satellite companies for phone and video packages. For two years, all you have read about is how successful SBC (SBC - commentary - Cramer's Take) and Verizon (VZ - commentary - Cramer's Take) are and what a bunch of bozos the cable companies are.

But here goes Comcast, offering a phone package that it thinks people will take. It's a phone package that requires little extra infrastructure and might just grab people who are sick of paying for a DSL line, a phone line and a cable line. The Wall Street Journal reports that Comcast CEO Brian Roberts will announce at an investor conference this morning "plans to market an Internet-based phone service."

I have never believed that the phone companies have the jump on this stuff. I cede wireless to them, but I can't cede to them the home video stuff because, other than in a couple of areas around the country, they've done nothing to make you feel confident that they can pull it off.

Comcast, on the other hand, has done nothing to make you feel that it can't pull it off. Comcast consistently has delivered on its projections. It held back on offering the phone service until the technology was right and until it could make a big profit on it -- something that doesn't ever seem to constrain the telcos.

Of course, as soon as this is in the air about Comcast, the press is all over it with the alternatives: "Is this because the Disney (DIS - commentary - Cramer's Take) bid failed?" "Do you really have a chance against the phone companies?" It's a wonder that the Robertses try to do anything, given the second-guessing that seems to accompany their every move.

There is one difference this time vs. the last year, though: Comcast has a rising stock. The stock says the company is doing things right. Verizon and SBC, on the other hand, have peaking stocks. The stocks say they are losing.

Soon the press will take its cue from the stocks, as it always does, and you will read scores of articles about how Comcast is beating Verizon at its own game.

Of course, all that really happened here is that Comcast made sure it could win before it launched its phone bid. It made sure it did it right, unlike the other cable companies that constantly seem to offer things and then never follow up on them.

That's why I would stay long Comcast if I owned it (which I do for Action Alerts PLUS), and buy some if I didn't. And, yes, I would sell the Verizons of the world. Too much hype and hope, and not enough infrastructure, to compete against Comcast.

Random musings: The Apple (AAPL - commentary - Cramer's Take) breakout on Friday was astonishing given that everyone knew Apple had a great Christmas. I had the same experience as Barry Ritholtz, by the way: The iPod arrived without the engraving. Could that be a story lurking out there?

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At the time of publication, Cramer was long Comcast.

James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column to [e-mail]. Listen to Cramer's RealMoney Radio show on your computer; just click here. Click here to buy Cramer's latest book, "You Got Screwed!" Click here to order Cramer's autobiography, "Confessions of a Street Addict."