5G technology will more closely tie cable and wireless together than ever before
It has been sometime since cable companies Comcast and Charter announced that they will be expanding into the wireless space. The impending 5G technology has more closely tied cable and wireless together than ever before, and put simply, wired networks will begin to look more like wireless ones, and as the density of wireless networks rise, they will begin to resemble wired networks.
According to MoffettNathanson Research, “The distinction between wired and wireless networks will disappear. There will simply be ‘the network’.”
Beyond this, paid television has been struggling for some time now to compete with tech companies like Amazon and Netflix that continue to invest in original programming.
As of Q2 2019, Comcast’s Xfinity mobile, launched in 2017, has a total of 1.58 million lines. While the company experienced a year-over-year growth of 103%, the entry into wireless has been an expensive one for Comcast, and according to Comcast executives, that isn’t going to change anytime soon.
“While we expect this overall trend of improvement in Xfinity mobile’s financial performance to continue, we anticipate customer-related acquisition expenses will increase in the seasonally strong 3rd and 4th quarters,” explained Comcast CFO Michael J. Cavanagh on last week’s earning call.
He added that in order to see positive financial performance for mobile on a stand-alone basis, mobile penetration of Comcast’s broadband base needs to be in the mid to high single digits.
Xfinity mobile is meant to function as a value-add strategy for the company’s core broadband business, which continues to perform well.
Subscribers can expect to pay $45/month for unlimited data usage with Comcast, but also have the option of a pay-by-the-gigabyte plan for $12 per GB.
In the second quarter, Charter’s Spectrum Mobile, launched about this time last year, added 208,000 mobile lines. As of Jun 30, 2019, a total of 518,000 mobile lines were served by the company.
Charter also charges $45/month for unlimited data usage, but is a little pricier by the gig than Comcast at $14 per GB.
Both Comcast and Charter’s mobile services stem from the same Verizon mobile virtual network operator (MVNO) agreement, which means that on either plan, subscribers have access to the Wi-Fi footprint of which ever company they are subscribed to, and then, in cases when that Wi-Fi is not available, they roll over to Verizon’s network.
A more recent addition to the cable-goes-wireless trend is cable company Altice USA, who is doing so via a 2017 MVNO agreement with Sprint. Just last week, the company announced that for $25/month, it will be providing its employees with a first look at its forthcoming mobile service.
The recently launched Altice Mobile’s price points significantly under cut Comcast and Charter at $20 per line per month (starting with the first line) for Optimum and Suddenlink customers and $30 per line per month for consumers in or near the company’s footprint who are not Optimum or Suddenlink customers.
In an effort to differentiate itself from the crowd, Altice called its MVNO a “full infrastructure-based MVNO,” saying that its Sprint-powered MVNO won’t be like other “light” MVNOs. The comment is most likely a reference to the roughly 19,000 AirStrand small cells the company deployed onto its cable network in support of Sprint’s cellular network in New York, a type of partnership that many believe will become more common as 5G gains traction.
