Cablecos to disrupt US mobile market


If one thing is clear about 5G, it is that it will be a wireline as well as a wireless platform. Its base standards may be taking shape in the 3GPP, the bastion of mobile industry power. But in reality it will hasten the death of the mobile-only operator which was such a star of the telco industry in the first decade of this century.

5G will be as wireline as it is wireless – it will rely on high quality fiber to support dense networks and Cloud-RANs; in its fixed form it may fill gaps in wireline broadband deployments. More importantly, the enforced convergence of wireline and wireless links in 5G will enhance business model changes which are already under way with current technology – the consolidation of fixed and mobile operators to offer multiplay services. With 5G technology, that consolidation can extend from unified billing to actual unified access.

In theory, a mobile-centric operator could take that platform to increase its power, accessing fibre through leasing deals and offering the bulk of its quad play over wireless. After all, until recently, mobile was the only growth engine for the telcos, lumbered with their ageing copper networks and business models.

Verizon bucks trend for MNOs to tie up with wireline:

But now, the balance of power has shifted. The telcos and cablecos have upgraded their wires and placed themselves at the center of the quad play. Vodafone, once beloved for its lack of wireline albatross, is scrabbling for cable investments. Mobile-centric operators are trying to huddle together to gain scale (Hutchison’s various attempts for its 3 Europe subsidiaries, Vodafone and Aircel in India); or they are putting themselves up for sale to telcos (EE and BT in the UK).

This shift is seeing wireline operators, especially cablecos, not just getting closer to MNOs, but usurping some of their role in defining and driving next generation wireless platforms. In the US, major cablecos Comcast and Charter have agreed a pact on mobile developments and services, and Charter last week offered some details of its 4G and 5G trials. The US cable R&D arm, CableLabs, is taking an active role in 5G standardization.

Amid all this, however, Verizon is bucking the trend. By contrast with AT&T, Verizon has a small (if wealthy) wireline footprint so can really be classed as a mobile-centric operator. So repeated rumors that it was looking to acquire a major cableco – while also ex-tending its fixed footprint by deploying 5G fixed wireless access (FWA) as early as 2018 were logical.

Such is the resurgence in the value of fixed operators that some analysts, including our sister service Faultline and Online Reporter, argued that, a few years down the line, it might be the cablecos acquiring Verizon. Either way, the assumption is that consolidation around a fixed/mobile play is the way to go, in order to compete more effectively with AT&T (Sprint and or T-Mobile dance around the cablecos for the same reason).

But now Verizon claims it has lost interest in a cable merger and is looking for growth primarily from its activities in content. It is taking the gamble of expanding vertically, pushing its business model up the stack into content, media and services – no longer as a complement to extending its reach horizontally with cable deals to boost its wireline footprint, but as its main strategy. The acquisitions of AOL and Yahoo will be central to its growth plan, rather than that of Comcast or Charter.

This article is an abstract from the Wireless Watch service. Learn More. 

Previous articleLPWAN Technologies: A Game Changer for Smart Cities
Next articleGuest Wi-Fi Essential for Customer Engagement in Hotels
Caroline has been analyzing and reporting in the hi-tech industries since 1986 and has a huge wealth of experience of technology trends and how they impact on business models. She started her career as a journalist, specializing in enterprise and carrier networks and in silicon technologies. She spent much of her journalistic career at VNU Business Publishing, then Europe’s largest producer of technology publications and information services . She was publishing director for the launch of VNU’s pan-European online content services, and then European editorial director. She then made the move from publishing into technology market analysis and consulting, and in 2002 co-founded Rethink Technology Research with Peter White. Rethink specializes in trends and business models for wireless, converged and quad play operators round the world and the technologies that support them. Caroline’s role is to head up the wireless side of the business, leading the creation of research, newsletters and consulting services focused on mobile platforms and operator models. In this role, she has become a highly recognized authority on 4G systems such as LTE and WiMAX, and a prolific speaker at industry events. Consulting and research clients come from major mobile operators, the wireless supply chain and financial institutions.


Please enter your comment!
Please enter your name here