What is the chance of long-term success for cable television competitors in wireless? The wireless industry has always been a fast growing and continually changing space. We have seen many successes and failures over time. In fact, sometimes companies are successful for a while, then crash and burn, both on the handset and the network side. So, what’s in store for cable TV in wireless?
Cable TV, as an industry, is changing. It is a very different place compared to one short decade ago. And it will be just as different ten years from today. It’s a moving target.
We all remember a world where the cable television company had a different model. They didn’t care about customer satisfaction. Since they had no competition, they never had to worry about losing customers. So, back then, while the investor was rewarded, the customer suffered.
Pay TV leaders today are Comcast Xfinity and AT&T DirecTV NOW
Then things started to change over the last decade as new competition entered the space. Companies from other spaces like telephone and wireless, started offering pay TV services. And these competitors started winning market share away from the cable TV industry.
The result was a painful lesson to the traditional cable television industry. They needed to improve their relationship with their customers.
Today, things are very different. Today, the top two leaders in pay TV are Comcast Xfinity
This was a wake-up call to every cable television competitor. Some acted swiftly in an effort to stabilize the loss to their customer base. That’s when we started to see something good starting to happen.
Companies like Comcast introduced Xfinity and Charter introduced Spectrum. That’s when every cable TV company including Altice, Time Warner Cable and others suddenly started to care about the customer.
Cable TV competitors apologized for neglecting customers
We all saw the cable TV television commercials where they apologized to their users for their past poor behavior. Talking about how, in the past their customer service was sub-par. And how they promise to get better.
This was music to the ears of their customers, who had been abused for decades. Customers wondered, was this real?
The same thing happened in the local telephone business in the early 1990s. In the 1980s, the regional Bell operating companies or RBOCs didn’t have competition either. Customers complained about their lack of satisfaction during that time.
I’m sure you recall the comedian Lily Tomlin on the TV show Laugh In in the 1970s, playing the snooty telephone company operator Ernestine, ticking off customers. It was funny because it was true, as companies don’t have to care when there is no other competitor for customers. They had nothing to lose.
Customer satisfaction is same problem the cable TV industry faces today
And that is the same problem the cable television industry is facing today. A decade ago they had no real competition. Today, they do.
As the Baby Bell competitive battle with long-distant giants started, the Bells got better and stronger with customer care and customer relations, and that improved customer satisfaction.
In the late 1990s, the Baby Bells won the battle against the long-distance competitors and eventually acquired them. SBC acquired AT&T and Verizon
In the years since, the elephone industry kept blending with and competing in other industries creating several, new competitive battles.
Today, companies like AT&T and Verizon are two of the largest and strongest competitors offering wireless, telephone, Internet, pay TV and an assortment of other services.
This is a large part of the new threat traditional cable TV operators have been facing. Another threat comes from new technologies and competitors on IPTV like Hulu, NetFlix
Next threat to cable TV industry is 5G wireless pay TV
Next, 5G wireless is going to usher in wireless pay TV, which will grow to be another threat to the cable TV companies.
Wireless pay TV has already started. It began in the current 4G world with AT&T DirecTV NOW and their wireless pay TV service delivered over the AT&T Mobility network, anywhere in the USA. Expect this to continue and expand with AT&T and others as more competitors enter this space. T-Mobile
The response to this threat is some cable TV companies are offering new services themselves. They are also now offering a full range of pay TV, telephone, Internet and wireless.
Cable TV used to be the primary service of this industry. Today, the primary service is high speed Internet. The other services are supporting legs to the stool creating a sticky-bundle of services to solidify their customer base.
Xfinity Mobile, Spectrum Mobile, Altice Mobile preparing for 5G wireless threat
The strategy for the cable TV wireless offering is different than traditional wireless. They are not interested in winning the wireless wars. They don’t battle wireless leaders for market share. Instead, they are simply using wireless as another leg to their stool.
And this may be the sticking point. They are in the process of creating a sticky bundle. When a customer uses multiple services, they become more stable. That’s the reason cable TV is in the wireless business. Not to win at wireless, but to create a sticky bundle.
Is this enough to create long-term success in the highly competitive and rapidly changing wireless and pay TV industries? That’s the question every cable TV company, every worker, every investor needs to be asking.
Cable TV companies turn to sticky bundles to stabilize customer base
So far, Comcast Xfinity Mobile is doing well. So, I expect Charter Spectrum Mobile will be doing well as well. And when they enter the wireless space, I also expect Altice Mobile to do well. At least in this early stage.
The question is this… will they continue to do well with wireless, or is this only a short-term gain? That’s the real question. No one has an answer yet. The need to stabilize their customer base is real and must continue to be managed. The need for growth is also key.
However, the growing competitive threat from 5G and other IPTV technology is real. The cable television companies need to prepare for the changing and growing marketplace.
They need to prepare for the new 5G wireless pay TV threat and more. They need to prepare for new competitors and new technology. So far, so good, but let’s keep our eyes open as this story continues.
Jeff Kagan is an Equities.com columnist. Kagan is a Wireless Analyst, Telecom Analyst, Industry Analyst, speaker and consultant. He follows wireless, wire line, telecom, Internet, cable TV, IPTV, Cloud, Mobile Pay, FinTech and communications technology. Email him at [email protected]. His web site is www.jeffKAGAN.com. Follow him on Twitter @jeffkagan.
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