Cable is the New Wireless. And Wireless is the New Broadband

Cable has finally done it.  After decades of periodic failed attempts at a wireless service business, big cable appears to have cracked the wireless code.  Comcast has already passed one million wireless subscribers (1).  Charter, who followed the Comcast playbook and launched a wireless service this summer, expects 650,000 wireless subscribers after one year (2).  Both used Mobile Virtual Network Operator (MVNO) models with Verizon as the Mobile Network Operator (MNO) partner.  Altice expects to launch their own wireless service (3) next year (2019) as a Sprint MVNO.  Of Cable’s big four it would seem that Cox Communications is the outlier, with no stated plans for their own MVNO launch.  However, Cox is the only one participating in the millimeter wave (5) spectrum auctions this year, so we can expect that they will also be in the wireless mix at some point.

Cable’s Wireless Vision

Now that cable has found a foothold in wireless where do they go from here?  A short-term perspective might suggest that this is simply about adding more customers and keeping the ones they have.  While those are certainly near-term objectives, their long-term vision for wireless is much more strategic.

A combination of emerging technologies, new market dynamics, and updated regulatory approaches to spectrum allocation are simultaneously aligning.  This is providing the cable industry with an opportunity to not only succeed as wireless service providers but to potentially drive a new wireless evolution.

Today’s broadband internet and wireless consumers increasingly expect seamless transitions between transport technologies.  Data is data, whether we are sitting at home, working at the office, having coffee at the local café, or cruising down the highway to visit the in-laws.  While great strides have been made over the last decade or so to achieve this, there is much more to be done.  Leaders in both the cable and wireless industries understand this and they are willing to engage in a peculiar state of simultaneous competition and collaboration.

The importance of new strategies in wireless and broadband is enhanced by the Internet of Things.  IoT is now beginning to open up a world of opportunities for new business-to-business solutions made possible by all sorts of new connected devices.  All those devices must connect to some kind of network and the type of network they connect to will often depend on their use cases.

This all may seem a bit complicated, but top cable executives have not been shy about their long-term vision for wireless.  To put it all into perspective, we can break their vision down into the following four steps.

Step One – Massive Wi-Fi Deployment

Launching an MVNO wireless service is actually the second major step in Cable’s wireless transformation.  The first was the deployment of millions of Wi-Fi hotspots.  For years the Cable Wi-Fi Alliance (6), consisting of the big four U.S. cable providers, have collaborated to blanket their service areas with a mesh Wi-Fi network.  These hotspots now number over 20 million.  The map below illustrates the combined Cable Wi-Fi Alliance coverage.

The Cable WiFi Alliance National Hotspot Coverage Map (Source, Spectrum WiFi page)

Step Two – Sell a Wireless Service

As previously noted, Comcast and Charter have now launched a consumer wireless service using a Mobile Virtual Network Operator (MVNO) model.  They both lease the wireless network from Verizon, but they provide their own device procurement and customer support infrastructure.  Altice will do the same with Sprint in 2019.  Now, along with the Wi-Fi footprint, they are adding direct wireless subscribers and learning how to run a wireless back office.

 Step Three – Tie it Together with CBRS Spectrum

The next phase is all about CBRS Spectrum (8) at 3.5 GHz which is a new range of radio spectrum being made available by the FCC through a new spectrum sharing model.  Crucially, this spectrum sharing model will enable neutral hosting (9).  Neutral hosting provides the ability for new types of entities, like large venue owners, to deploy their own private LTE networks.  Cable operators may deploy locally targeted LTE networks (on either 4G or 5G standards) using this spectrum.

Charter’s CEO Tom Rutledge articulated it this way: “Charter plans to use the 3.5 GHz band in conjunction with its Wi-Fi network to improve network performance and expand capacity to offer consumers a superior wireless service.”

CBRS may also open up a new partnership dynamic between cable operators and wireless providers.  A collaborative approach may lead to a scenario where the wireless operators “take the outdoors” and the cable operators “take the indoors” with a roaming arrangement linking the two.  The diagram below illustrates this possible strategy.

Image above provided by this white paper

Side note:  Since Cox Communications is participating in the millimeter wave auction but is not moving on an MVNO strategy, could they potentially be skipping the MVNO step to go straight to building out targeted 5G networks complementary to their Wi-Fi footprint and just utilize roaming partnerships for access to large area wireless networks?

Step Four – Small Cell to DOCSIS Integration

This is what Charter’s CEO Tom Rutledge has called their “6G Wireless” which is not the same as the wireless industry’s conceptual definitions of 6G, but compelling nonetheless.  Mr. Rutledge was quoted in Light Reading (10): “6G… is our pre-spec definition of the integration of small cell architecture using unlicensed and licensed spectrum working together interchangeably with our advanced DOCSIS roadmap to create high-capacity, low-latency product offerings.  We expect that over time our existing infrastructure will put us in a unique position to economically deploy new powerful products that benefit from small cell connectivity.”

Now, let’s consider the wireless network operator perspective.

Wireless to Sell Residential Broadband

Video cord cutting is so 2010.  The new cord cutting is all about residential broadband internet service, and the wireless providers are going after cable’s dominance in this domain.  Don’t take my word for it.  Verizon has already launched their first iteration of 5G Wireless (13) in four major cities, branded “5G Home.” Their website makes it clear that this service is all about the home.  They even implore their prospective customers to “cut the cord.  Go 5G Home.”

T-Mobile is also swinging for a big piece of residential broadband.  Should their merger with Sprint succeed, “New T-Mobile” (14) ambitiously expects to become the U.S.’s fourth largest residential internet service provider, reaching over 9 million fixed wireless broadband customers by 2024.

Wireless 5G is of course a much bigger deal than just a competitive threat to cable broadband.  The wireless industry has now entered the deployment phase for 5G.  We will see wireless networks transform to a 5G standard over the next few years with 5G mobile devices available at scale in 2020.  5G will open up huge opportunities across multiple industries and technological solutions, including robust smart city applications, advancements in autonomous cars, virtual and augmented reality and more.

The question of how 5G Wireless will change our world is for another article.  For now we can be sure that the entire competitive landscape of wireless and fixed broadband is shifting.  And, before long, your cable company may be your new wireless provider, and your wireless provider may provide your home internet service.

Up may be down and down may be up, but it’s never boring.

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