Mobile still a big no-show at WideOpenWest

WideOpenWest (WOW) was among the first mid-sized US broadband operators to introduce mobile services when it soft-launched the offering in select markets in June 2022 and followed with a broader launch across its full footprint a few weeks later.

Nearly 18 months later, it's increasingly evident that WOW has made little progress on the mobile front. The company has yet to disclose any mobile subscriber and revenue figures in its quarterly financial results, and discussions about WOW's mobile strategy have been largely absent in its earnings calls. Wireless-related discussions on WOW's Q3 earnings call last week were limited to the rising competition WOW is facing from fixed wireless access (FWA) providers.

Light Reading asked WOW for mobile-related numbers and why the company has yet to disclose any so far. The company's response filled few gaps in the company's mobile story.

"We haven't included customer numbers for our mobile offering as part of our earnings report since its launch last year," a WOW official said in an emailed statement. "However...WOW! mobile powered by Reach continues to be a great choice for consumers looking for a mobile service that is flexible, affordable and meets their needs, expectations and budget."

WOW's mobile service runs on the T-Mobile network and is underpinned by a platform from Reach that handles elements such as billing and packaging.

Related:WideOpenWest soft launches mobile service

WOW currently offers four no-contract tiers of mobile service that feature a $10 per line discount for its home broadband subs.

WOW also sells smartphones online along with a bring-your-own phone option. WOW's online store features a wide range of Android phones, including some higher-end models such as the Motorola Razr+ ($1,099) and Samsung Galaxy Z Fold 5 5G ($1,899). At last check, WOW sells just one older iPhone model – the Apple iPhone SE 2^nd Gen, for $299.

It's not fully clear why WOW has yet to disclose any mobile results, though it's possible that subscriber and revenue numbers haven't reached material levels.

Smaller cable ops face big challenges getting into the mobile biz

Related:WOW exploring possible sale – report

Wave7 Research analyst Jeff Moore told Light Reading that he monitored WOW's mobile marketing activity in the wake of the launch last year but has not seen any incremental, mobile-focused marketing activity from the operator since.

Roger Entner, founder and lead analyst of Recon Analytics, said WOW's apparent lack of success in mobile so far illustrates that the challenges smaller cable operators face with launching and growing a mobile business should not be underestimated.

Mobile "is a tough business, in general" and isn't a service that simply can be bolted on, Entner said, noting that it took the cable industry multiple stabs at establishing itself in mobile before the likes of Comcast and Charter Communications found a recipe for success. "To be successful in mobile, you need the right people for it."

That mobile has yet to emerge as a material business at WOW "tells you everything," he said. "For them to hit 10% of revenues is a long climb. When it comes down to it, it's hard. It's not money found on the street."

Time will tell if other small, independent cable operators have similar troubles establishing a foothold in mobile. The National Content and Technology Cooperative (NCTC), an organization with hundreds of members (including WOW), is getting into the game via agreements with Reach and AT&T. Cable One, one of NCTC's largest members, has remained on the sidelines, not convinced it makes sense to add mobile to the bundle.

Related:WOW to phase out own pay-TV product as it strikes deal with YouTube TV

Entner said a major challenge for smaller operators getting into mobile is gaining access to new Apple devices, which enjoy a 70% share of the US postpaid market, that consumers covet.

"Apple has really high minimum volume commitments" that smaller operators are hard-pressed to meet, he explained. "It's a huge challenge for the little guys."

Other priorities

And it's also possible that mobile simply isn't a priority at this point as WOW instead focused on the core of its business – home broadband – and moves ahead with a plan to build fiber networks in greenfield areas. That buildout plan calls for WOW to build fiber to about 400,000 new homes in parts of central Florida and South Carolina by the end of 2027.

Mobile might also be a low priority as WOW struggles to return to broadband subscriber growth. The company, which bills itself as a "broadband-first" operator, lost 4,400 high-speed Internet subs in Q3 2023, and expects those losses to nearly triple in Q4. WOW attributed that to churn fueled by recent rate increases and the rolling off of promotional pricing, a sluggish home move market and competition from FWA that's impacting the lower end of the broadband market.

Some analysts are starting to sour on WOW's broadband growth story as subscriber losses accelerate and expansion targets run behind expectations.

"We got this one dead-wrong, believing WOW could turn around subscriber growth while driving ARPU [average revenue per user] growth," KeyBanc analyst Brandon Nispel explained in a research note in which he downgraded WOW shares to "Sector Weight." 

Given WOW's current set of challenges, "we no longer believe WOW can growth HSD [high-speed data] customers in 2024, and we believe HSD growth is likely to be flat," he added.

WOW is also focusing on a program to migrate its pay-TV base to YouTube TV, now considered WOW's primary video offering. Speaking on WOW's Q3 earnings call last week, WOW CEO Teresa Elder said about 13% of new broadband subs are signing up for YouTube TV.

WOW isn't forcing customers off of its legacy video product, but Elder said the company would like to shut down its legacy, QAM-based video platform over the next 18 months or so. That would pave the way for WOW to shift to an all-IP network and free up spectrum for broadband services, including future DOCSIS 4.0 upgrades.