x
Optical/IP

Analyst: MSOs Too Wary Over Wireless

U.S. cable operators are starting to inch their way into the wireless services arena, but adding wireless to their service bundles isn't top of their "to do" lists just yet, according to the latest report from Light Reading's Cable Industry Insider. (See Cable Goes Wireless.)

"I still think [wireless] is not number one or two on the agenda. A good question is if it's even number three," says Heavy Reading senior analyst Alan Breznick, the author of Cable's Wireless Strategy: More Than Just Talk.

He says cable operators are spending more time and resources on residential VOIP and advanced video services, such as high-definition television (HDTV), but should be more aggressive about their push into wireless.

"I think they should place more emphasis on it," Breznick explains. "I think it's something they're going to need to do in order to compete effectively against phone companies that already have big wireless pieces."

But as Breznick shows, the MSOs aren't standing still when it comes to wireless market activity. His report provides updates on the "Pivot" joint venture between Sprint Corp. (NYSE: S), Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC), Bright House Networks , and Cox Communications Inc. , which is expected to offer services in a total of 40 markets by the end of 2007.

The report also explores: how some MSOs such as Rogers Communications Inc. (NYSE: RG; Toronto: RCI) are going it alone; the potential implications of the 2006 Advance Wireless Services (AWS) spectrum auctions; and the upcoming auctions of valuable 700MHz spectrum.

The MSOs, though, will find it hard to match the marketing campaigns of the major telcos, particularly those that carry a significant "cool factor," such as the iPhone launch by AT&T Inc. (NYSE: T) and its partner Apple Inc. (Nasdaq: AAPL). (See The iPhone Arrives.)

Instead, cable operators appear best positioned to offer a truly converged package of services. "That may be the one thing [cable] can do better, or at least quicker, than the phone guys," Breznick says.

In addition to sizing up the landscape, the report also speculates on whether the largest operators in the U.S. might decide to change gears and pursue a wireless strategy without Sprint. Despite cable's troubled history with partnerships -- which included the now-dissolved @Home project for high-speed data services and another cable-Sprint partnership that disbanded several years ago -- some believe the Pivot relationship will remain intact for some time still.

"For the foreseeable future, I think the partnership relation will continue. It's a great way to learn the business," Bob Scott, the director of business development and wireless for Scientific Atlanta , says in the report.

But a different story may emerge after cable gets its sea legs in the wireless business and the current three-year deal with Sprint draws to a close.

Breznick believes that relationship could be dissolved by the start of the next decade, unless cable remains reliant on Sprint's spectrum. "Who knows? Comcast may own Sprint by then," he adds, citing a persistent rumor that has yet to materialize.

— Jeff Baumgartner, Site Editor, Cable Digital News



The report, Cable's Wireless Strategy: More Than Just Talk, is available as part of an annual subscription (6 bimonthly issues) to Light Reading’s Cable Industry Insider, priced at $1,295. Individual reports are available for $900.
jmunn 12/5/2012 | 3:05:03 PM
re: Analyst: MSOs Too Wary Over Wireless Yes, I agree that wireless bill bundling for cable will become important but if Cox doesn't give me a lot more HD channels pretty soon they won't have me as a customer at all.

Didn't Direct TV launch a new satelite to give 200 HD channels? That makes Cox's 16 HD channels look pretty weak.

If all the source material is in HD (due to FCC rules) but the cable company only gives me SD on a lot of channels then they are getting in the way. I am tired of watching all of my favorite shows in SD on my not so new HD TV.

Isn't GPON a lot closer to how the HFC network works (source and splitters) vs. the old Telco POTS switched network? Then why didn't cable push GPON first or at all? Eventually I don't think you will be able to tell the difference between the Telcos and the MSO/Cable companies.

Just my personal optinion.

jmunn
Jeff Baumgartner 12/5/2012 | 3:05:03 PM
re: Analyst: MSOs Too Wary Over Wireless As far as your HD comments go, you may be in okay shape. At the SCTE show earlier this year, Cox chief Pat Esser said the MSO is looking to offer as many as 50 HD channels by 2009, and as many as 100 by start of 2009. Freeing up the capacity is one part of the challenge...another is finding that many HD channels, which is also part of the challenge faced by DirecTV -- finding all those HD channels it wants to offer.
frnkblk 12/5/2012 | 3:04:59 PM
re: Analyst: MSOs Too Wary Over Wireless DirectTV is blowing smoke when they talk about 200 HD channels. There are 20 or less networks available today.

It's easy to drive up the count by offering each premium channel per time zone, and then formatting standard-definition content into an HD window. I sincerely doubt DirectTV will be able to offer more than 50 non-duplicated/time-shifted HD channels by 2010...

Frank
alchemy 12/5/2012 | 3:04:58 PM
re: Analyst: MSOs Too Wary Over Wireless The most important thing in cellular is coverage. The second most important thing in cellular is coverage. The third most important thing in cellular is coverage. ....

I think the MSOs are correct to be wary over wireless. It's one thing to have a cheap MVNO agreement with Sprint to pluck a few customers away from AT&T and Verizon. It's another thing entirely spend the huge dollars to have a true nationwide footprint required to compete with the two big guys.
Jeff Baumgartner 12/5/2012 | 3:04:56 PM
re: Analyst: MSOs Too Wary Over Wireless I think you're right about that. Like the early days of DirecTV and EchoStar, when they focused on SD channel tonnage (and the NFL package, in the case of DirecTV), they are now starting to talk up the HD tonnage and putting a number out there...and hope that's a carrot that draws in subs. But, as in those earlier days, DBS can't carry more than what's actually available. Competitively, and for all those consumers who have HD sets, I like that DirecTV is applying this kind of pressure, though.