More Cable Operators Expected to Get Into Mobile

Expect more cable operators to roll out wireless mobility service in 2022 or 2023, analysts told us. The mobile subscriber growth Comcast, Charter Communications and Altice have had since starting their services likely won't level off for some time, they said.

The trio ended Q3 with about 7 million total mobile lines, up more than 2.2 million from Q3 201. Comcast, which launched mobile service in 2017, had 3.7 million, and Charter -- which followed a year later -- 3.1 million. Bernstein's Peter Supino said those two and Altice are likely to add about 2.5 million total subs this year due to new pricing packages rolled out last year. As cable moves into mobile and the wireless industry increasingly invests in residential broadband, the risk is a convergence problem where each industry puts pressure on the other's core business, Supino said.

Tier 2 ISPs like Cox Communications "absolutely" want to build wireless businesses, and in the next couple of years many will do so, Supino said. A Cox spokesperson told us "the market is becoming more attractive for us to enter the wireless space." RCN, also cited in interviews as likely to enter the mobile space soon, didn't comment.

For cablers, mobile is a way to create a new service bundle as their voice and TV service sub numbers drop. “They're not making a lot of money, but they're not trying to. It's all about the bundle" and keeping profitable customers, said wireless consultant Jeff Kagan. He said other cablers wouldn't get the benefit of as-favorable mobile virtual network operator terms as Comcast, Charter and Altice enjoy, but they likely need to go the mobile route out of necessity. "Cable operators will have no doubt noticed the success of Comcast, Charter, and Altice in this space," emailed Omdia's Kristin Paulin.

Besen Group CEO Alex Besen said one possible route for smaller cable operators is partnering with an existing cable mobility service and rebranding it. He said once the operators move to offering 5G service, that opens the door to offering IoT services and private networks for enterprise customers, and they might be able to do so on their own spectrum.

Some cablers interested in mobile face hurdles. Part of Comcast's success in mobility comes from offering flexible, affordable plans, due to using its extensive Wi-Fi networks to offload as much traffic as possible, cutting what it pays Verizon via the MVNO, Paulin said. CCG Consulting President Doug Dawson said Comcast and Charter are able to buy data amounts from the Verizon MVNO, but smaller cable operators likely would have to buy existing cellular plans and relabel them, meaning they likely would be large money losers. He said mobile service is supposedly not very profitable for the cable operators offering service now.

"For a little guy to get to that point is just really difficult," and they might never get to the mobile subscriber numbers in the hundreds of thousands that would let them command better MVNO deal terms, Dawson said. There's no upside to wireless carriers extending MVNOs to other cable operators, and they might regret their existing ones, Dawson said. He said Comcast and Charter, with big Wi-Fi networks, can also use those for mobile data traffic, reducing how much they would have to pay Verizon. Charter plans to launch a field trial this year that pairs its Wi-Fi service with thousands of citizens broadband radio service band small cells for mobile subs (see 2110290020).

With Comcast and Charter having mobile subscription penetration rates of around 10% of their broadband subscribers, "there is still plenty of runway left for the cable operators in mobile," emailed Omdia's Paulin. "The flexible, affordable plans seem to be well received, especially when coupled with trusted names for service like Comcast/Charter/Altice. Some customers also know they are ultimately on the Verizon network, and likely view that as a quality option." Parks Associates' Kristen Hanich said cable operators already offering mobile will probably have accelerating customer growth at least through 2024, with Comcast especially benefiting this year from its pricing efforts.