Taking a Look at Cable TV MVNO Wireless Progress: Jeff Kagan

Jeff Kagan  |

Image source: Xfinity Mobile

Why have cable TV companies tried to get into wireless? Actually, they have tried twice over the last decade. The first time was a disaster. In fact, several companies like Comcast, Charter, Cox, Facebook and Amazon (remember the Fire Phone?) all tried and failed. Then, a few years ago, Xfinity Mobile, Spectrum Mobile and Altice Mobile tried again.

Let’s take a closer look and see how they are doing this time around and what their future looks like.

Today, the top three wireless carriers in the United States are AT&T Mobility, T-Mobile and Verizon Wireless. These are the national wireless service providers. They offer voice and data services and are driving the 5G train.

AT&T, T-Mobile, Verizon are the top wireless networks in USA

Smaller networks like US Cellular and C-Spire Wireless own part of their own network as well as reselling the big three.

Then there are MVNO resellers big and small, like Xfinity Mobile, Spectrum Mobile, Altice Mobile, AT&T’s Cricket Wireless, Verizon’s Visible, Tracfone, Consumer Wireless, Pure Talk and countless others.

Regarding quality, generally speaking, carriers that own and operate their own networks have the best quality, features and reliability. Smaller wireless carriers also generally have good quality and features.

Xfinity Mobile, Spectrum Mobile, Altice Mobile are MVNO resellers

The problems come with some of the MVNO resellers. Some of them are good, but others are not so good.

Sometimes the problem is the quality of the voice. Other times the problem is with the wireless data. These providers also generally have lower limits on the amount of data you can use.

Every competitor lets you have access to unlimited wireless data, but after you reach a certain point, the data speed slows significantly. Traditional wireless carriers usually offer a higher amount of data in comparable plans.

Reliability is often a problem with cable TV MVNO wireless offerings

In addition, if you have been a direct customer of AT&T, T-Mobile and Verizon, you know what to expect. That’s why many who switch to an MVNO reseller of the same networks notice a decline in service availability. Too many times the network or the towers are full of traditional wireless customers and MVNO users get blocked.

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This is the state of wireless as it stands today in the United States.

Wireless is on a path of consolidation and has been for decades. Yesterday, we had countless smaller networks all competing for our business. Today, many smaller networks have been acquired by larger ones.

Today we have fewer and larger providers. This reduction in independent players can sometimes translate to higher prices and so-so quality.

US Cellular, C-Spire, Cricket, Visible, Pure Talk, Tracfone and others

In this mix of services, cable television wireless tends to offer good quality in both voice and data in the crowded cites. Their problems often come on the road or in less crowded cities. Especially if the places you travel to are not in their cable TV footprint.

Today, even though cable TV wireless is growing, there is not really any added benefit vs. other wireless providers like AT&T, T-Mobile and Verizon.

Xfinity Mobile, Spectrum Mobile, Altice Mobile growing in popularity

When it comes to cost, cable TV wireless service is competitively priced. It is lower than traditional wireless carriers. And it is either the same or a little lower than several other MVNO players.

However, cable TV wireless has some weak spots as well.

One of these is they are not national service providers. True, their services do resell national networks, so you can call nationwide. but they only sell service to their existing customers and only within their region.

Wireless trade-off between availability and price

So, just like if you are in a Comcast Xfinity region, you cannot sign up with a competitive cable TV company. The same goes with their wireless service.

Cable TV wireless service is not as reliable as traditional wireless service directly with AT&T, T-Mobile and Verizon, but it is less expensive. This is the same with all MVNO resellers.

So, there are trade-offs among quality, speed, availability and price. The choice, as always, is yours to make.

Cable TV companies use wireless to slow customer loss

It is also interesting to note that none of the cable TV companies markets its wireless service in an aggressive fashion. This means they are not offensive. However, they are not even defensive.

The strategy behind cable TV wireless is not growth. Not yet anyway. Rather, cable TV sees wireless as a way to slow the loss of traditional cable TV market share. You see, traditional cable TV is shrinking. It is being replaced by competitors and new technology.

The cable TV industry saw this threat and that’s why companies first introduced wireless a decade ago. After that failure, the loss in traditional cable TV continued and forced them to take a second shot at wireless.

Wireless creates sticky bundles for cable TV companies

This second attempt seems to be working better. Not only is their wireless market share slowly growing, but it is creating a sticky bundle, so their customers stay put.

Cable TV companies learned from competitors on this point. They don’t need to show profitability with wireless. All they need to show is how wireless helps them maintain their customer base.

Looking backwards the primary service of a cable TV company was cable TV. Today, they offer a few different services like Internet, VoIP telephone and now wireless.

In fact, most people are surprised to hear that the primary service of cable TV companies is no longer cable TV. It is Internet.

This sticky bundle helps them maintain their customer bases and slow the losses they see in traditional cable TV.

Will cable TV ever see wireless as a profitable business?

So, today, wireless and other services help them create a sticky bundle. Tomorrow they may use wireless to become a real competitor. Someday they may be profitable and see wireless as a great growth opportunity.

So, the future of wireless in the cable TV space is always changing and will continue to do so. They have benefits like lower cost, but they also have problems like availability.

Today they have been showing ongoing growth since they reentered the space a few years ago. I expect this rate of growth to continue and over time, change.

Investors like what they see, while users are less satisfied. This is the balance with which the cable TV industry has always wrestled.

All that being said, it looks like the cable TV industry is doing well in wireless this time around. While there is still more work going forward for the cable TV companies, they seem to be on the right path based on what I see today.

 

Jeff Kagan is an Equities News columnist. Kagan is a Wireless Analyst, Technology Analyst and Commentator who follows Telecom, Pay TV, Cloud, AI, IoT, Tele Health, Healthcare, Automotive, Self-Driving cars and more. Email him at jeff@jeffKAGAN.com. His web site is www.jeffKAGAN.com. Follow him on Twitter @jeffkagan and LinkedIn www.linkedin.com/in/jeff-kagan/

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Equities News Columnist: Jeff Kagan

Source: Equities News

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.

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