Cable operators have dabbled in mobile technologies for years. But 2020 might end up marking a major turning point for the industry as a whole as executives in the space stop treating mobile as a hobby and instead embrace it with a passion.
The cable industry's progress in mobile was pretty stark in the first quarter of 2020. As Lightshed analyst Walter Piecyk pointed out, Comcast (215,000) and Charter (290,000) handily beat AT&T (87,000) and Verizon (-68,000) in adding overall postpaid customers in the period. Only T-Mobile managed to outstrip the cable companies with the 452,000 postpaid customers it added to its network during the quarter.
It's clear that cable is no longer "irrelevant squared."
And though cable operators' collective number of mobile customers is still relatively miniscule – roughly 4 million in total, compared with more than 300 million commanded by Verizon, AT&T and T-Mobile combined – the cablecos are already among the biggest MVNOs in the US market. Plus, they're growing their customer base faster than most of the market's biggest players.
More importantly, cable operators are widely believed to be nearing the point where their mobile businesses actually start to make some money. "The business is clearly scaling impressively, which is a shame that COVID-19 will drive lower 2Q20 volumes at a time as mobile attempts to reach the critical subscriber mass to break-even," wrote the Wall Street analysts at Cowen, estimating that Comcast needs roughly 1 million more mobile customers to reach that financial milestone.
To be clear, all of cable's mobile customers today actually reside on the networks of Verizon, AT&T and T-Mobile. Verizon is the MVNO partner for Comcast (Xfinity Mobile) and Charter (Spectrum Mobile), while AT&T and T-Mobile provide the network for Altice Mobile.
However, that might change soon too, thanks to CBRS.
"The FCC's CBRS Priority Access license auction is scheduled to begin on July 23rd. We expect Comcast to participate," wrote the Wall Street analysts at Lightshed in a recent post. "Cable companies have an interest in CBRS to offload wireless data and extend the reach of their broadband service offering. Comcast recently asked for an FCC waiver to bid in the CBRS auction as a separate entity. It also filed for an experimental license one month ago."
If cable companies do purchase CBRS spectrum, they could use it to build their own mobile networks in select, high-traffic areas – that would help them reduce the amount of money they pay in their MVNO deals.
Indeed, there are already indications that cable companies have worked to pit AT&T against Verizon in order to reduce their MVNO rates.
But the Lightshed analysts speculated that cable's interest in mobile could expand beyond the CBRS band and Comcast's 600MHz holdings.
"We believe that Dish could be an attractive new MVNO partner for Comcast," they wrote.
Dish Network, for its part, is widely expected to close its purchase of millions of Sprint's Boost customers on June 1, a transaction that would make it an MVNO of T-Mobile. That acquisition is also designed to position Dish to begin building its own 5G network with its massive spectrum holdings.
It's that 5G network – full of unused and inexpensive capacity – that could attract cable's interest, according to some Wall Street analysts.
"We have always thought of the cable companies as natural customers for Dish," wrote the analysts at New Street Research in a recent note to investors.
At the very least, the rise of Dish's 5G network could give cable providers another lever to pull in their mobile efforts.
All of this, taken together, certainly underscores the notion that cable is increasingly embracing mobile as more than just a pastime.