NCTC members will profit from org's new MVNO deal, CEO says

MINNEAPOLIS – THE INDEPENDENT SHOW – Hundreds of independent US cable operators are in position to offer mobile service at the non-promotional price of $30 per line – and still make a profit.

That's according to Lou Borrelli, the CEO of the National Content & Technology Cooperative (NCTC), an organization that recently cut deals with AT&T and Reach that enables hundreds of NCTC members to bundle mobile services with broadband. AT&T is on board as the MVNO, with Reach serving as the mobile virtual network enabler (MVNE). The NCTC has cast itself as the mobile virtual network aggregator (MVNA) in this construct.

"Our deal has no loss leaders in terms of market plans. The market standard outside of promotional pricing ... is $30 per line," Borrelli said here during an opening session that provided an update on several NCTC initiatives, including the new MVNO option. "At $30 per line, anybody in this room can offer service and you will make money. There are no negative margins in our plans."

NCTC has not yet outlined how that pricing will factor in with any potential unlimited data and by-the-Gig options. WideOpenWest (WOW), an NCTC member that has a separate deal with Reach and uses the T-Mobile network, markets a mix of unlimited and by-the-Gig plans, with pricing ranging from $15 to $45 per month.

Update: In an interview here at the show, Borrelli noted that the $30 per line figure stems from the NCTC's negotiations with partners to ensure that members could offer an attractive, competitive rate and still make a margin on a mobile product.

"The objective was to be able to have members be price-competitive," he added. However, NCTC members will have flexibility on how they price and package mobile.

Borrelli said "several" NCTC members are in the onboarding process for mobile, but didn't identify any by name. Notably, execs from two NCTC members – TVS Cable and Allo communications – will participate in a panel on Tuesday (August 1) pertaining to lessons learned from "early adopters" of the NCTC's new MVNO agreement.

The NCTC cuts programming and technology deals for more than 700 operator members. Borrelli estimated that the NCTC's collective membership serves more than 40 million broadband customers across all 50 US states.

"If you take away from our group the members that already have an MVNO [deal] or are an MNO [mobile network operator] that can't participate, our potential is somewhere in the 22-24 million range," Borrelli said. About three-quarters of the companies representing those customers are signed up and are working through the paperwork to launch mobile services, he said.

"Collectively, as far as launching MVNO in the cable industry ... we will be – if not the largest – one of the three largest providers of mobile service in our industry," Borrelli predicted. Adding mobile to the bundle, he added, will "help you increase your average revenue and margin per customer."

Comcast and Charter Communications – two non-NCTC members – have had success bundling mobile with broadband via their respective MVNO deals with Verizon. In the wake of Q2 2023 results, Charter (6.2 million mobile lines) and Comcast (5.98 million) now have a combined 12.8 million mobile lines in service.

Opinions vary

But not all NCTC members are ready to take the plunge. There was a mixed reaction to the new MVNO option in a follow-up panel with operator CTOs.

MTCO Communications, a telco NCTC member serving parts of central Illinois, is keen on the deal, CTO Brian Kettman said. Mobile, he said, "helps you capture the customer" and will help his company retain them.

Ken Johnson, chief digital and technology officer at Cable One, believes the new NCTC MVNO agreement "has the potential to be very complementary to the business." But he stressed that Cable One has yet to decide its path on mobile and still has questions about the economics of it.

"Good luck. No thank you," was the reaction from Cash Hagen, CTO of Bluepeak, a company formerly known as Vast Broadband. He echoed concerns about the economics of a mobile offering, holding that Bluepeak is better served by focusing on its core competencies, such as broadband.

"It's not worth taking the eye off the ball of what we are focused on," Hagen said.

Borrelli argued that the deal the NCTC has arranged would not place members into the handset business, requires "virtually no upfront capital," and that the co-op went through "great pains" to provide a way for members to offer fixed plans and fixed margins. The "heavy lifting," he added, is handled by Reach, the MVNE in the mobile partnership.

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— Jeff Baumgartner, Senior Editor, Light Reading