During an investor conference last week, T-Mobile COO Mike Sievert was pretty lax about the news that cable operators are looking to jump into wireless via MVNO deals. But T-Mobile and all the wireless incumbents might do well to stay on their toes, MoffettNathanson said this week.
According to the Thursday note, the advent of 5G will drag cable into the wireless business whether they like it or not. But, MoffettNathanson analysts said, it’s a field where cable’s wired infrastructure will excel.
As wireless densification occurs for 5G, MoffettNathason said wireless and wired networks will increasingly look the same. Additionally, traditional wired networks like those run by cable operators will increasingly be accessed by wireless users through wireless transfer interfaced like Wi-Fi. MoffettNathanson said this blending of wireless and wired networks will continue until the distinction between the two disappears completely. Within ten years’ time, MoffettNathanson wrote, we won’t talk about wireless and wired networks separately – they will be referred to as the same entity.
But with densification also comes the need for backhaul, meaning those with the densest wired network – i.e. cable operators – will come out on top.
“Realistically, Cable’s impact on wireless is mostly a post-2020 story,”MoffettNathanson analysts wrote. “But in telecom terms, where infrastructure is everything (and it takes years or decades to deploy), that’s not as far away as it sounds, and over the long term, as wired networks become more and more important to wireless, Cable is positioned to be the winners in wireless, just as they have been in wireline.”
The note comes in the context of recent announcements from both Comcast and Charter that they are looking to activate MVNO agreements to launch wireless services on Verizon’s network. Both indicated their services would use a combination of Wi-Fi and cellular technology. The wireless services would be offered as a bundle add on to their other services, the operators said.
While Charter declined to provide a date for their wireless launch, Comcast said it was looking to have its wireless service up and running by mid-2017.
MoffettNathanson said cable’s entrance to wireless as MVNOs isn’t likely to be immediately consequential. But after 2020, once cable operators arrive in the market as “real players,” MoffettNathanson said incumbents will be in a fight for their lives to eek out an existence in a crowded market.
“The industry is already too crowded, and if networks really do begin to take on the economic character of wired networks, we know from experience that the sustainable number of networks will necessarily fall,” the analysts wrote. “We believe Cable will be one of the winners. That leaves four wireless operators vying for what might only be one, or perhaps at most two, additional spots to fill.”
Filed Under: Infrastructure, Cables + cable management
