Cablecos’ Growing Wireless Play

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Cable companies have had numerous false starts in wireless. With CBRS 3.5 GHz licenses, they have a real shot at offering true mobility services to their broadband customers.

Today, three out of the top four cable companies in the U.S. and several regional cable operators offer wireless mobility services to their customers typically as a mobile virtual network operator on a national wireless carrier network.

Cablecos build and manage their own hybrid fiber-coax (HFC) networks for delivering triple-play (video, internet access, digital voice) broadband services to their customers. These HFC networks form a natural backhaul facility for WiFi hotspots and small cells in the cableco operating territory. 

Comcast (NASADQ: CMCSA), the largest cableco, operates in 39 states that have a total population of 111 million people. In that coverage area, Comcast’s HFC network passes more than 59 million residences and businesses and of those, the company has 32 million customer relationships. Xfinity Mobile is a Verizon Wireless MVNO with 2.4 million subscribers at the end of 2Q20. 

Charter Communications (NASDAQ: CHTR) is similar in scale to Comcast with 52 million homes passed and over 30 million customer relationships, covering nearly 103 million people in 44 states. Spectrum Mobile, also a Verizon Wireless MVNO, reported 1.7 million subscribers at the end of 2Q20.

Altice USA (NYSE: ATUS) provides broadband services to about 5.0 million residential and business customers across 21 states with more than 8.9 million homes passed at the end of 2Q20. ATUS operates as Optimum, in the New York metropolitan area, and as Suddenlink, mainly in the south-central U.S. Launched in 3Q19, Altice Mobile had roughly 144,000 lines at the end of 2Q20.

Even as a T-Mobile-Sprint MVNO, Altice Mobile has full access control with its own core network, Home Location Register and SIM cards. This way the company controls seamless data offloading and traffic handover from any device between its fixed WiFi and mobility wireless networks. 

Privately-held Cox Communications, the third largest cableco, is an outlier. The company serves more than 6 million residential and commercial customers in six clustered cable systems in 19 states. Almost 10 years ago, Cox abandoned plans to build its own 3G CDMA wireless network using 700 MHz licenses. Seeing new opportunities, Comcast, Charter, Cox and other cablecos are bidding for Priority Access Licenses in the current CBRS 3.5 GHz auction. Having PALs in their respective operating territories allows these cablecos to offer exclusive, branded wireless services to their broadband customers.

As a MVNO, cableco wireless services piggyback on a major carrier’s network for which cablecos pay wholesale rates. Owning CBRS 3.5 GHz spectrum gives cablecos an attractive ‘own vs lease’ option to build and operate dedicated wireless infrastructure that utilizes their established HFC networks for backhaul.

Understand that the cablecos’ intent in wireless is not to compete head-to-head with national or regional wireless service providers. Rather, they see their branded wireless offering as an add-on to their triple-play bundles that can drive incremental revenues and create stickiness with their customers.

With PALs, cablecos must build a ‘private’ 3.5 GHz LTE network with dedicated RAN and CORE for exclusive coverage in their territory along with out-of-territory roaming on other carrier networks. Customers can bring their own CBRS-enabled smartphones that the cableco can program for use on its network. Alternatively, customers can purchase new CBRS-aware devices through the cableco’s retail stores.

Even if the cablecos acquire only a limited number of PALs in their territory, they can still operate with economic General Authorized Access managed unlicensed spectrum. (see, Strategies for Securing CBRS 3.5 GHz Spectrum). Though existing customers are the prime target, expect cablecos to pitch their wireless services at appealing rates to people in their territory who are already customers of other wireless carriers.

By John Celentano, Inside Towers Business Editor

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