Charter FCC filing shows detail on how cable will undermine MNOs


The major US cablecos have been setting the pace in incorporating wireless into their service strategies, and until now Comcast has been the frontrunner. But its actual commercial launch only came this year, and was followed quickly by an alliance with Charter to cooperate on mobile services, bringing the two largest cable operators together in an axis which could be a threat, down the line, to the mobile carriers. Now Charter has provided more detail on its own plans to support wireless and converged services, and eventually a quad play to challenge Verizon and AT&T.

Verizon and AT&T. Although the US cablecos dabble periodically with acquiring spectrum (Comcast secured airwaves in the recent 600 MHz auction), they have scarcely deployed licensed cellular networks because of the cost and the huge headstart commanded by the MNOs. Even when the major cablecos partnered with Sprint to form a combined spectrum holding company, which was designed to underpin a joint national 4G network, the venture fell apart amid conflicting agendas and the sheer power of the big two telcos.

That power looked set to be consolidated further as Verizon and AT&T snapped up many smaller players, but in fact, the competitive landscape has shifted again and there is a better chance for new entrants – as long as they are armed with deep pockets and strong customer reach – to chip away at the power of the leaders. Verizon and AT&T have been taking higher risks recently in their M&A strategies, looking to move up the value chain by acquiring content and media activities. They realize that mobile dominance may no longer be just about who can buy and control the most spectrum, whether via auctions or acquisitions.

That has been the mainstay of mobile operator power throughout the life of the cellular industry, but now there are new chances for non-spectrum holders to offer mobile services using shared spectrum and localized RANs and packet cores. This is the chance Comcast and Charter have in their sights (and they may, of course, add a cellular acquisition, of T-Mobile or Sprint, or both, to expand their scale in future). But even without such a deal, they can challenge the MNOs at last, not in terms of national coverage, but by deploying wireless where it can best enhance their model and harness their existing assets of dense wireline networks, strong content partnerships and high levels of consumer awareness.

A network of LTE or 5G small cells, augmented by WiFi, running in unlicensed spectrum (perhaps with MulteFire), and with its own packet core, could be built specifically to support a certain area (such as a city downtown) or a certain service (for a particular vertical market or IoT application). That would enable the cableco to invest in build-out only where that could be targeted at a proven revenue generator, while reducing its reliance on an MVNO deal with a national MNO – though that would still be necessary to allow its users to roam.

All these trends are reflected in Charter’s new filing with the FCC, which sets out its wireless strategy. Like Comcast, it started with WiFi homespots and hotspots, as a low cost way to allow its cable subscribers to access content and the Internet wherever they went. Charter’s major shareholder is Liberty Global, which is pursuing similar WiFi strategies in Europe via various subsidiaries. But on both sides of the Atlantic, cablecos want to add cellular to the mix, to support services that require the predictable performance and improved security of LTE – but they do not want to rely entirely on a conventional MVNO deal, in which they have little control over how the network behaves.

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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.


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