Blurred Lines of Cable and Wireless

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 By Jay Thomas Munson

Making the jump into the super-competitive U.S. wireless market might be difficult for some, but for Comcast the transition could be a walk in the park. In 2011, Comcast made a deal with Verizon Communications to start a new wireless service that was shared on Verizon’s infrastructure. But now, Comcast may be courting a more practical partner.
Forbes recently reported the possibility of Comcast acquiring Sprint outright, in which case it would be off and running. If Sprint and Comcast merged, the combined businesses would be a direct challenge to the AT&T-DirecTV merger, solidifying the blurred vision associated with the division of cellular/cable/wireless.

Amir Rozwadowski of Barclays explained, “[A] Wall Street Journal report notes that [SoftBank] had suggested its intent to potentially off-load its stake in Sprint to both Comcast and Altice, following challenges in improving Sprint’s subscriber momentum and its network quality, as well as given SoftBank’s inability to execute on its original plan of merging Sprint with T-Mobile.” However, it seems that SoftBank is “all in” now, but things could still change.

Some believe Comcast could have a tough go at it, competing as a “new” wireless company in the price sensitive U.S. wireless market. However, Comcast sources feel the transition will be less complex because the company has 10 million outdoor and indoor Wi-Fi hotspots throughout the country. This technology would open the door to a newer concept of Wi-Fi first (rather than cellular).

“Wi-Fi first” is currently being implemented by Republic Wireless, who flipped the traditional method of cell service first and Wi-Fi second. Wi-Fi connections, in general, are not nearly as strong or reliable as established cellular connectivity. However, Comcast could use their Wi-Fi access points in combination with Sprint’s cellular coverage to create a dynamite network.

Comcast is also a major player in Pay-TV, which has lost 1.5 million customers per year since 2013. The decline can be contributed to fierce competition from Netflix, Hulu, Amazon Prime and Sling TV, to name a few. Comcast has been able to patch the hemorrhaging subscriber loss in recent quarterly reporting through its “Triple-Play” bundling. This reduces the overall cost to subscribers, when purchasing all three features (cellular, cable and wireless). With a Sprint-Comcast merger, wireless may prove to be its highest valued service.

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