Is Wi-Fi the Way Forward for Cable?
How does a wireline service provider thrive in a wireless service environment? For years, the U.S. cable industry has struggled with that question, making several vain, expensive attempts to join the wireless movement. Now the cable industry has embarked on its boldest mission yet to make wireless a key part of its product portfolio. Specifically, major U.S. MSOs are aggressively deploying public Wi-Fi hotspots to provide free wireless broadband service to their broadband customers. By establishing a wireless presence, cable is extending its role in video, high-speed Internet, business services and possibly even mobile phone services. So far, U.S. MSOs have deployed about 150,000 public Wi-Fi hotspots throughout the nation, according to a new Heavy Reading Cable Industry Insider, From Wired to Wireless: Cable Uses Wi-Fi to Extend Its Reach. By about this time in 2014, Heavy Reading projects that the industry will have more than 250,000 cable Wi-Fi hotspots in place. Collectively, the cable industry has now spent more than US$175 million on building out Wi-Fi hotspots, and that amount will double to more than $350 million by 2014, according to the Heavy Reading report. Cable operators enjoy the advantage of being able to string many of their Wi-Fi access points (APs) on their own aerial lines. The MSOs' initial motivation is to add value to cable packages and remain competitive with the increasing capabilities of 4G mobile and over-the-top (OTT) video services, the report says. Insiders say there already is evidence that Wi-Fi is helping to retain cable customers, driving down churn rates. Cable operators are also deploying Wi-Fi as a key component of their growing business services portfolios. Bigger opportunities may lie ahead, the report says. Five MSOs -- Bright House Networks, Cablevision Systems Corp., Comcast Corp., Cox Communications and Time Warner Cable Inc. -- are teaming up to offer a joint CableWiFi SSID that enables their customers to get Wi-Fi service across each other's service areas. As their Wi-Fi density increases, MSOs could form business relationships with mobile service providers, including mobile data offload services, or develop a much-speculated mobile virtual network operator (MVNO) service with Verizon Wireless. But Wi-Fi is an unlicensed, best-effort technology that faces many technical and operational challenges, including quality, scalability and security. The report says cable is looking to exploit emerging capabilities such as HotSpot 2.0, which will support seamless roaming across multiple MSO service areas and Wi-Fi hotspots. The report explores cable's Wi-Fi deployment strategy, the opportunities and challenges and the implications for cable operators and suppliers. Included is a look at six suppliers that are supporting cable's Wi-Fi efforts with access points and other technologies, including , Alcatel-Lucent, Arris Group Inc., Cisco Systems Inc., Ericsson, Ruckus Wireless, and WeFi. — Craig Leddy, Contributing Analyst, Heavy Reading