Home » Altice USA »Charter Spectrum »Comcast/Xfinity »Competition »Consumer News »Public Policy & Gov't »Wireless Broadband » Currently Reading:

Kagan: Cable Company Wireless Is Designed to Trap You in a Bundle, Not Compete in Wireless Business

Comcast and Charter Communications have no real interest in competing head-to-head in wireless with AT&T, Verizon, T-Mobile, or Sprint. Instead, the two cable companies hope to trap you in a bundled package of services too inconvenient to cancel.

Jeff Kagan, a longstanding telecommunications analyst specializing in the cable industry, believes Comcast, Charter, and other cable operators entering the wireless business have no intention of being a serious competitor to the country’s four largest mobile companies.

“The goal of XFINITY Mobile [from Comcast] is to offer their customers another service and to create a sticky bundle,” Kagan said. “It’s not to lead the wireless wars. It’s not to increase their market share for traditional reasons. It is simply to create a sticky bundle to stabilize and grow their customer base.”

Kagan

XFINITY Mobile and Spectrum Mobile (from Charter), both require customers to be signed up for their respective internet services. If a customer cancels internet service, they will lose their mobile service. That could prove to be a major hassle for wireless customers, because they will have to properly port out their existing phone number(s) to another provider before dropping broadband.

Kagan believes cable operators will use mobile service to further strengthen their bundle by tying discounts to the number of services each customer takes through the cable company.

“Customers who use one service find it easy to switch away to a competitor,” Kagan said. “However, when they use multiple services and get a discount for the bundle, they become sticky and generally stay put. And the more services a customer uses, the larger the discount, the stickier they get and the less likely they are to wander.”

That is also likely to be true with Altice, which operates Optimum (Cablevision) and SuddenLink and has partnered with Sprint to offer cell service.

Sprint and T-Mobile, which are planning to merge, have repeatedly argued cable operators will be aggressive new players in the mobile business, giving the potentially combined carrier fierce new competitors. But Kagan doubts that will prove true.

“The problem is, the sticky bundle is not a low-cost solution,” Kagan offered. “With that said, the higher cost to the cable television companies is less than that of losing their customer base. So, the cost makes sense as simply a cost of doing business.”

The challenge cable operators face is that none plan to own and operate their own traditional cellular network. Comcast and Charter have partnered with Verizon Wireless to resell access to its 4G LTE network and Altice will rely on Sprint. Leasing access on an ongoing basis is likely to be more expensive that relying on your own network, but beyond offering Wi-Fi calling and experimental access to future 5G-type services in the emerging CBRS band, cable operators will remain almost completely dependent on their wireless provider partners, limiting their effective ability to compete.

Kagan believes the goals of the two industries are different. Wireless operators are trying to monetize their networks through usage, while cable operators are trying to find new services that will keep customers loyal and are willing to ignore monetizing their wireless side businesses to achieve that goal.

Leave a Reply

avatar

This site uses Akismet to reduce spam. Learn how your comment data is processed.

  Subscribe  
Notify of

Search This Site:

Contributions:

Recent Comments:

  • James Phares: Unfortunately, in my location, Spectrum is still my best Internet option because the only other broadband option is AT&T. At least I'm able to sa...
  • Paul Houlw: What I can't get... How come we hear about "the race to 5G?" all the time but there's never been talk about a "race to fiber?"...
  • Cristian: Can some one plz tell me if i paid for new spectrum services i paid $181 ,3 days later they canceled my installation and said i was gonna get a refu...
  • Rob Green: No they don’t...
  • John: They get away with it because the government protects them and not the consumer. We all know that those at that business that are making millions in s...
  • AM MA: I hate Charter/Spectrum. They are incredibly dishonest. At times the government needs to step-in and deal harshly with such company's. I had internet ...
  • Barb: My spectrum just went up is it going up again?...
  • NJ Orlando: I did that as well last year. The problem is, they will only do that for you one time in the life of you being a customer. I am not paying $70 just fo...
  • Dave Lee: I am 59 years old and have never ever subscribed to any cable tv of any kind "ever" in my life. I live in a small town about 35 miles north of St. Lo...
  • Chrys: I will NEVER use or recommend Spectrum again! Shady and unethical practice of charging for services never received when terminating service. It is wr...
  • JAMES: I am not a customer. Not only do we get Spectrum ads in the mail every few days at our residence, today they mail us a Spectrum Business 5x6 card cove...
  • Henry: Vandon how much is Granite paying you to post these messages on everyone's comment? Granite only resales Frontiers services.......you should get a re...

Your Account: