If you’re a cableco, how do you get wireless right? Well, one idea is to stop obsessing about voice and instead use it as an extension of the home landline broadband connection.
Cable executives at the Cable Show this week were mulling how to compete with the comprehensive quad plays on offers from rivals like Verizon Communications Inc. and AT&T Inc., which have national cellular voice arms. "Wireless is a conundrum for the cable industry in how we take that first step," Comcast Corp. CEO Brian Roberts said during a panel discussion.
But the cablecos might have an opportunity to leverage wireless most effectively as a mobile data play.
“With growth in new home broadband service subscribers slowing, providers will need to steal existing broadband users away from other providers if they want to continue to grow their customer base,” said Daryl Schoolar, In-Stat analyst. “Our research shows that current broadband users would be willing to switch from their current broadband provider to one that could combine a home and on-the-go service. Clearwire has been using this strategy since last September to win subscribers in its two WiMAX markets.”
Cablecos are getting the message. Comcast has just signed on to be an MVNO on the Clearwire Corp. WiMAX network. It’s a 4G network that is optimized for mobile Internet access. While offering voice via VoIP is a likely possibility, it’s also likely that a majority of the use will come via laptops and netbooks.
Meanwhile Cablevision Systems Corp. has built out a public Wi-Fi network offering symmetrical access speeds of 1.5mbps, comparable to a T1. It’s making the service free for its existing customers and charging everyone else for quality service. It acts as a retention device (the well-worn “sticky service”) and sweetens the pot for those deciding between DSL from Verizon and cable modem. The strategy has seen a 70 percent growth in traffic.
Cox Communications Inc., the third-largest cable TV provider in the U.S., is building its own cellular wireless network. Even so, CEO Patrick Esser characterized wireless as secondary. "The most valuable asset I own is the last mile to the house," Esser said. "Wireless won't change that."
But wireless can protect that account. In-Stat has found that 80 percent of respondents to a survey said they had some level of willingness to switch from their current broadband provider to one that combines both home and on-the-go service. Forty percent said they would be willing to pay their current home broadband provider an extra $10-15 a month for a home and on-the-go service combo.
"A seamless connection between inside the home and outside the home will be a must-have," said Craig McCaw, chairman of Clearwire, at the Cable Show. "We see the obvious elements of change are on the horizon."
But competitors beware. AT&T Inc. has just tapped into the trend with the announcement that it’s selling a $50 netbook in Atlanta that comes bundled with a two-year contract that gives users both a home DSL line as well as mobile 3G and Wi-Fi acess nationwide.
“Since this was first announced during CTIA, all the focus has been on the wireless portion of the announcement, and the selling of a notebook in a traditional cellular phone manner,” said Schoolar. “What has been totally overlooked is the combination of home and on the go broadband access as a single service. In-Stat feels the combining of home and on-the-go broadband is just as important a trend as the selling of subsidized netbooks.”
