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Cable Exploring New Mobility Plays

Craig Leddy
Heavy Lifting Analyst Notes
Craig Leddy
7/1/2016

As cable providers continue to deploy WiFi hotspots, their attention is turning to creating mobile services capable of capitalizing on the increasing amount of data, voice and video that is traveling wirelessly. Cable's legacy in mobile is marked by partnerships and plans that crashed and burned, but new technologies, market conditions and business dynamics are giving rise to potential mobile plays.

The exact path to mobility for cable is not entirely clear, but cable multiple system operators (MSOs) are exploring their options, according to a new Heavy Reading report, "Taking Flight: Cable's New Routes to Wireless Mobility." The report analyzes cable's mobility prospects, updates activities by the four largest cable providers and profiles 12 suppliers that promoted WiFi products and solutions during the INTX 2016 cable and broadband convention in May.

Cable providers have deployed more than 500,000 public WiFi hotspots, and that amount expands into the millions when WiFi homespots are taken into account. WiFi, now the primary distribution vehicle for data in the US, provides the foundation for wireless video, voice and data service offerings for consumers and businesses. When coupled with cellular capability, cable could take its wired services into the wireless stratosphere, Heavy Reading says.

In the report, Heavy Reading analyzes several key strategies that cable providers have been exploring, including these leading contenders:

  • Community WiFi: using public hotspots and homespots to blanket a community with WiFi coverage for mobile broadband, including CableWiFi cable partners

  • Voice over WiFi (VoWiFi): using WiFi to launch a wireless phone and data service, as Cablevision Systems attempted with its Freewheel service

  • WiFi First: using WiFi for voice, video and data service, with mobile virtual network operator (MVNO) partnerships for alternate and backup cell coverage

  • MVNO partnership: using a mobile carrier's infrastructure for a cable branded mobile service with WiFi as an alternate

  • Stand-alone mobile service: using owned spectrum for a cable-branded mobile service with WiFi as an alternate

While cable could rely solely upon WiFi for wireless services, the opportunities increase if companies own wireless spectrum or partner with a mobile carrier, the report says. Cablevision's recent phase-out of its Freewheel VoWiFi service shows the challenge of using WiFi alone.

Comcast has said it will exercise a right to be an MVNO of Verizon Wireless, and it is a bidder in the ongoing Federal Communications Commission (FCC) auction of broadcast station spectrum that is intended for wireless service. Charter Communications, through its Time Warner Cable (TWC) and Bright House Networks (BHN) acquisitions, could join in the Verizon deal or potentially gain spectrum through post-auction deals. However, it is unclear what type of service would emerge, and the companies only say they are exploring options.

MVNO partnerships were the death knell for cable's previous mobile aspirations and they still are fraught with challenges, the report notes. But an MVNO relationship with a mobile carrier could fill in the gaps in cable's WiFi coverage and lead to services that could be rewarding for both of these would-be foes. Cable would make a more robust wireless play while mobile carriers could either share in their revenue or gain more support for mobile offload, cell backhaul and small cell services.

Wireless is now a priority for most cable companies, both from an offensive and defensive standpoint, Heavy Reading says. While cable providers are seeking to move onto mobile's turf, mobile carriers are starting to stream video programming packages. Over-the-top (OTT) wireless players, including Google's Project Fi, Microsoft's Skype and Facebook's WhatsApp, and a host of MVNO players add to the competitive dynamics.

— Craig Leddy, Contributing Analyst, Heavy Reading

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