A New Picture Emerges for Cable CellularA New Picture Emerges for Cable Cellular

Over the past several years, cable companies have advanced numerous attempts, plans, announcements, and pilot offerings of mobile wireless service. Little has come of these efforts. Now, cable companies like Comcast, Charter, and Altice are focusing on adding cellular to the TV and Internet services they provide – and these offerings seem to be gaining traction. As reported in The Wall Street Journal, for example, Comcast had signed up 1.4 million wireless subscribers as of March.

Given changing economics of the cellular business, it’s now feasible for cable companies to support Apple iPhones natively with their new generation of WiFi-cellular wireless services. This means the decision regarding whether these services are a good fit for businesses is on the table for enterprise buyers. After all, given the prevalence of iPhones in corporate use, any service that would require iPhone users to switch to Androids would be a nonstarter in enterprise environments.

The cable companies have now checked the iPhone box, but the majority of enterprises -- and certainly those with 100 or more phones -- still prefer to deal with the operator directly rather than buying through mobile virtual network operators (MVNOs), including cable companies. While the cable companies will make use of their Wi-Fi assets for these offerings, they’ll need to depend on reselling a cellular carrier’s network service in order to provide uninterrupted coverage.

Playing in the cable companies’ favor is the fact that enterprises are under relentless pressure to cut costs, and these services are cheap! Comcast and Charter offer unlimited voice/data/text for $45 per line, per month; AT&T and Verizon unlimited plans start at $70 to $80 per month. The cable companies also offer usage plans at $12 or $14 per gigabyte. Now Altice, which acquired the Cablevision and Suddenlink properties, is planning to offer unlimited plans for $20 to $30 per month.

For now, these plans (and prices) are only available to subscribers of those companies’ Internet services. The shrinking cable TV market has already spurred the cable companies to refocus on selling Internet, UCaaS, and other services to business customers. If these wireless initiatives are successful, they could be expanded to include businesses as well.

iPhone Is In Because Voice Is a Giveaway

Key to the cable operators’ pricing strategy is the plan to carry as much of their customers’ data traffic on their Wi-Fi networks as they can. That will minimize how much they have to pay to the underlying carrier for use of its cellular network services.

All the major cable companies have deployed extensive Wi-Fi networks to provide mobile access to Internet customers from public gathering places. A few years ago, several of the cable companies got together to deploy Cable WiFi, which, in essence, is a plan to allow their subscribers to roam onto other partners’ Wi-Fi networks. According to Comcast, the Cable WiFi consortium now has an estimated 18 million hotspots nationwide.

It turns out that routing customer data onto Wi-Fi is pretty easy, as both iPhone and Android devices default to Wi-Fi (over cellular) for data traffic. If there’s an accessible Wi-Fi network within range, that’s where the data is going.

When voice was a more significant portion of wireless traffic, the strategy of depending on Wi-Fi was more problematic. iPhones default to cellular for voice calls, so the cable company would be paying the cellular carrier for virtually all voice calls. Android devices usually default to cellular for voice, though the OS allows a user to select Wi-Fi as the default for voice either in Settings or with a downloaded app. As a result, any Wi-Fi-first or Wi-Fi-only service that looked to save money by shifting voice traffic to voice over Wi-Fi supported Android devices only.

With unlimited talk and text (UT&T) plans, voice service has essentially become a giveaway. Since the requirement to route voice calls to Wi-Fi is no longer an issue, the cable companies no longer have to restrict customers to Android devices.

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Altice Wants to Take It a Step Further

The Comcast Xfinity Mobile and Charter Spectrum Mobile plans are relatively similar in service capabilities, pricing, and underlying cellular network (from Verizon). With its partnership with Sprint, Altice looks to differentiate its service.

I happen to be an Altice customer. Altice acquired Cablevision, my legacy cable provider, in 2016, and merged it with Suddenlink to form the fourth-largest cable company in the U.S. Still, with just short of five million subscribers, Altice is a small fry among Comcast and the other majors, but I always found Cablevision to be among the most technically aggressive of the cable providers. We were among the first to get cable Internet service and cable voice service, and the company also drove higher data rates and innovations like network DVR (i.e., the ability to store cable programming in the cloud for replay later).

In what is described as a first-of-its-kind agreement permitting a higher level of network integration, Sprint is allowing Altice “to connect its network to the Sprint Nationwide network and have control over the Altice USA mobile features, functionality, and customer experience.”

According to FierceWireless, the Altice offering is unique because "Altice will provide the SIM, voice messaging, customer care, and billing, and it will even negotiate roaming partnerships.” What is unclear is what difference that would make to either the profitability or the user experience.

In return, Altice is providing network connectivity to Sprint over its fiber facilities for Sprint small cell deployments. This is key for Sprint’s small cell and network densification plans for 5G.

Providing backhaul network access for all of the small cells that are envisioned for 5G, along with the perennial problem of cell placement, is proving to be one of the big challenges for carriers moving to 5G. With this agreement, Sprint will have access to Altice’s local fiber distribution facilities and be able to deploy strand-mounted small cells (i.e, these would be hung from Altice’s overhead cable wires). Thus far we’ve only heard of Sprint using this model in Altice’s Long Island, N.Y., service area, though this could be a model for cable company-cellular partnerships going forward.

Time to Pull The Trigger?

For some enterprise customers, particularly those with especially tight budgets, the cable-cellular offerings might be an option worthy of a second look. Even customers that wouldn’t even consider a cable-cellular service for the CEO might find some areas of the business where a solution like this might be just the ticket -- and at the right price point.

Of course, Comcast and Charter use Verizon, which typically comes out on top in the customer ratings, while Altice’s partner, Sprint, brings up the rear. On paper, Altice’s plan looks interesting, but exactly what advantage Altice gains by controlling the “mobile features, functionality, and customer experience” is something of a mystery. At the end of the day, Sprint is providing the critical cellular part of the service. Are Altice’s customers really going to get better service on Sprint’s network than Sprint customers?

The idea of a cheaper cellular service is attractive, but an even more functional offering than what the cellular carriers have been selling us is even more interesting. However, it’s important to note that Altice is being run by co-presidents Dexter Goei and Charles Stewart, both former investment bankers with no discernible experience in the mobile business. That should give you pause. The wireless industry has a long history of attracting bright-eyed though inexperienced people who are certain they’ve discovered the “next big thing in wireless” only to be dragged down by the myriad eddies and whirlpools that characterize the wireless business.

Still, in the mobile space we’ve been pining for a terrestrial wireless service (we’ve got plenty of satellite options) other than what the cellular providers have been offering. We could use it as a backup alternative if nothing else. The combined Wi-Fi resources of the cable companies seem to be the best available option for that at the moment.

With 5G now coming into view, it appears that a whole panoply of wireless options are appearing (or “reappearing”). The key for the CIO or mobility manager will be to know all you can (including all the warts) about what you’re committing to before you sign on the dotted line.