Google and Skype take note: Cablecos are becoming MVNOs for WiMAX, deploying Wi-Fi and embracing 100mbps to the home, in a push for a broadband everywhere strategy. And that just might make them the next great disruptive force in the telecom market.
The MSOs, of course, want to use a somewhat ubiquitous network to enhance their television content proposition. The idea is simple: more broadband, more customized content/video access whenever and wherever subscribers want it, more customer value and, ultimately, more money.
But it’s also a game-changer competitively, taking some of the wind out of the over-the-top providers, while executing on a broadband everywhere vision earlier than the telcos, which not only still have a lot of non-video-friendly DSL connections out there, and which are also waiting for their mobile broadband choice, LTE, to deploy next year at the earliest – in limited release. WiMAX, meanwhile, is on track to be available in 80 major markets by the end of 2010.
“Our vision of the marketplace is the leveraging of this whole idea of media mobility or content from the cloud,” said Floyd Wagoner, director of marketing and communications at Motorola Inc.’s access networks division. “The value of the service is increasingly being assigned to the over-the-top providers. The only thing I really use the service provider for when it comes to broadband is to get to content. Cable is using broadband everywhere as a first step to becoming competitive against OTT by offering content from the best providers in the world whenever you want it. So it’s monetizing that broadband in a new way, beyond just the fee for the pipe.”
Supercharging the Network
In order to make video content and broadband in general more valuable, one must be able to offer it in more places. It’s clearly a consumer need: Strategy Analytics estimates the number of people using mobile broadband on notebooks and netbooks to more than double in the next two years, approaching 30 million subscribers by the end of 2011.
And to bring video to those connections obviously takes real, preferably symmetrical broadband, not just an anemic 756kbps on the downlink. And on this, the MSOs have not been lax.
Cable companies first began extending their broadband footprint with Wi-Fi strategies, taking advantage of the increasing number of notebooks, netbooks and handhelds with embedded 802.11. Cablevision Systems last fall took on the Kryptonite-like municipal wireless proposition by building out a mesh Wi-Fi access network on Long Island that offers symmetrical access speeds of 1.5mbps, comparable to a T1. Cablevision is making the service free for its existing customers and charging everyone else; it acts as a retention device (the well-worn “sticky service”) and sweetens the pot for those deciding between DSL from Verizon Communications Inc. and cable modem. And, it worked, with Cablevision driving a full 70 percent in net subscriber growth in the first quarter its Wi-Fi gambit was in existence. Comcast Corp. followed suit earlier this year with free-for-subscribers Wi-Fi access in about 100 New Jersey train stations and parking lots.
