Headlines Of The Day
Cable companies make presence felt in cell phone business
The fastest-growing U.S. mobile phone carriers aren’t phone companies, but rather cable TV providers, The Wall Street Journal reports. Currently more than five million Americans pay for their cell phone service through their cable providers. Low prices, the ability to adjust their phone plans without difficulty and flexibility have been key factors in this trend.
It’s been cable operators like Comcast and Charter Communications who have recently disrupted the cell phone business. Both companies entered the wireless arena in recent years with the goal of retaining their customers. Cable operators have seen more subscribers leave in favor of streaming services and Internet-based television bundles. Pay TV service providers have turned to their mobile businesses to help compensate for those customer losses.
“I think we’re real, right?” Comcast Finance Chief Mike Cavanagh said of the company’s Xfinity Mobile unit during a recent conference,” according to The Wall Street Journal. Cavanagh added that the business would be profitable this year. “I think there’s no one that doubts that anymore.”
Last week, Comcast introduced new mobile plans in an effort to undercut the traditional carriers. The cable companies haven’t made too much of a dent in wireless carriers’ business however; they had approximately 50 times more mobile phone subscribers than cable companies did at the end of last year. Plus, cable companies still pay wireless carriers for infrastructure access. For example, Comcast and Charter rely on Verizon’s network and Altice USA works with T-Mobile.
Cable companies’ plan to overtake wireless carriers
Wireless carriers remain dominant in the cell phone market, but cable companies haven’t stopped trying to make headway. A former AT&T customer told The Wall Street Journal that he switched to Charter’s Spectrum Mobile about two years ago because he pays almost three times less per month for unlimited data. Cable companies can offer such discounts because cell phone users are using Wi-Fi, which they control, more than cellular networks, which allows them to keep their costs manageable. Currently, 80% of all U.S. mobile traffic was on Wi-Fi, according to Charter Chief Executive Tom Rutledge. Market researcher Opensignal noted that the average U.S. cell phone user was connected to a Wi-Fi network 60% of the time.
In the event Wi-Fi isn’t available, cable companies count on the cell phone network operators to keep customers on the go connected.
“They are an important enterprise customer for us,” Verizon CEO Hans Vestberg said of cable operators in December. “If they take share, ultimately we take share.”
Cable companies’ move into the cell phone business has been going on for almost 20 years. They had trouble gaining traction at times, but now cable operator customers acknowledged that they haven’t seen much, if any difference in their service quality. Cable companies are also looking to shrink the price gap between they and carriers. Comcast for example recently announced it would offer multi-line discounts for $120 per month.
Keys to a mobile subscriber base increase for cable companies
In a race as competitive as the one for cell phone subscribers, every increase counts. Cable companies have seen their mobile consumer base increase nearly four times during the last four years. The top U.S. wireless carriers have gained less than 2% during that period, according to research firm MoffettNathanson, The Wall Street Journal reports. Despite the growth disparity, wireless carriers are still far ahead of their cable counterparts—Comcast, Charter and Altice USA combined for 5.4 million mobile customers at the end of 2020. Meanwhile, the major wireless carriers, Verizon, AT&T and T-Mobile currently serve more than 260 million subscribers.
Limited reach is one potential reason the cable companies are so far behind in the cell phone subscriber account. For example, Comcast and Charter only offer mobile service to their customers. Altice meanwhile only offers wireless plans to customers who live in one of its operating areas. Cable companies could make their wireless services profitable if they built their own infrastructure cost-effectively and only counted on the major carriers for access in less-populated areas, according to MoffettNathanson telecom analyst Craig Moffett.
“The cable operators are in this strategically marvelous position of having to build only where they want to be,” Moffett said.
Cable companies bring CBRS into the fold
The Citizen Broadband Radio Service (CBRS) has been presented as a way for commercial real estate owners to have their own in-building private wireless network. But recently cable companies like Comcast and Charter have bought CBRS so they can keep customers connected when they aren’t on Wi-Fi. They have yet to build the cell infrastructure to provide the service on a large scale, but are testing it in certain markets. Charter didn’t participate in the Federal Communication Commission’s (FCC) recent C-band spectrum auction in part because the company felt the CBRS licenses worked better with its footprint, according to Chief Product and Technology Officer Rich DiGeronimo.
In the meantime, Charter and Comcast have renewed their contracts to continue running their services on Verizon’s network. AT&T said it could resell some of its network capacity to other operators, but hasn’t announced a deal with any cable companies, The Wall Street Journal reports. Connectedremag
You must be logged in to post a comment Login