Cable Providers Can't Ditch The Cable Quite That Easily
By Mike Masnick, Wed May 25 00:15:00 GMT 2005
With a new round of rumors talking about cable providers in the US getting into the wireless business, it's worth remembering that it might not be so easy.
The rumors about Time Warner's eventual MVNO agreement with Sprint went on for quite some time with plenty of discussions about how cable companies would rush into the "quadruple play" space (even if that's an inaccurate description). After all, telcos offered voice and data already, and were looking to add video -- but they usually already had a close relationship with a mobile operator. Considering the evidence that the bigger the bundle, the lower the churn rate, it's difficult to find fault in the predictions that cable companies would jump on mobile offerings.
Time Warner's move certainly supported that, and last week rumors started spreading that Comcast is now exploring its wireless options with nothing off the table: including purchasing a mobile operator. However, some analysts are beginning to throw some cold water on the predictions of cable wireless dominance. The biggest issue, of course, is that the choices are limited for cable providers. If they want national coverage (and they do), then they have to partner with either Sprint or T-Mobile -- both of whom are actively courting cable providers. No cable provider is going to build its own mobile network at this point -- as there just isn't spectrum available. At the same time, they won't partner with any of the other national mobile operators who are all closely tied to the major telcos.
The second issue is how well the cable providers will be able to market mobile service to users. Already, cable is the one industry that appears to have a worse reputation for customer support than the mobile industry. So, adding mobile service to the bundle, may not be very appealing to users who are already fed up with the type of support they've received in the past. Related to this is that it's going to take a good reason to convince customers that cable providers should be offering mobile service. The cable providers have been very successful in offering VoIP or digital telephony offerings -- but the advantage they've held there is that what they were offering was often much cheaper than traditional landline phone service from the telcos. Cable providers won't be able to cut costs too low on mobile service, however.
That's not to say there aren't opportunities for cable providers in the wireless space, but it needs to be approached carefully, with a better understanding of what makes sense, rather than just being "yet another" in the marketplace. Another option might be to wait a little while to see how other wireless technologies impact the market. It's clear that the wireless market faces some challenges these days, and a smart cable provider might watch to see how the ground is shifting before making a serious move.