5G Emerging as Competitive Arena for Mobile Broadband, Cable, and Fixed Wireless

Large cable companies in the United States are finding a way to enter the wireless market and increase their customer offerings by leveraging Mobile Virtual Network Operator (MVNO) arrangements with Mobile Network Operators (MNOs).

New mobile wireless players—such as Xfinity Mobile (Comcast) and Spectrum Mobile (Charter), both of which have an MVNO agreement with Verizon—are present on the market now along with newly formed Altice USA, which is promising wireless in 2019thanks to an MVNO agreement with Sprint.

So, one year from now we will have three new wireless carriers competing for subscribers with AT&T, Verizon, T-Mobile, Sprint, and others. Each of these companies brings with it many millions of broadband subscribers whom they use to expand their offerings to quad play (broadband, television, telephone, and wireless). This is a direct competitive response to Mobile Network Operators (MNOs) such as AT&T offering U-verse and DirectTV, and now with content from Time Warner and Verizon with its FiOS-based quad play, and to the upcoming T-Mobile/Layer3 TV broadband service.

The advent of 5G is likely to increase the competition for subscribers between MNOs and these “wireless cable” providers as the cable companies leverage their considerable advantages in Hybrid Fiber Coax (HFC) installed base for densification, backhaul, and fronthaul.

Comcast/Xfinity Mobile

Launched in May 2017, Comcast’s Xfinity Mobile uses Verizon’s network under an MVNOagreement and with its own network of 18 million Wi-Fi hotspots nationwide. Xfinity Mobile operates like any other wireless service except that it is only offered to Comcast subscribers, and the connection will automatically transfer to a Comcast Wi-Fi hotspot when one is in range. This “Wi-Fi-first” approach, according to the company, will offer a boost in speed on Wi-Fi and, if the subscriber does not have an unlimited data plan, will save data charges for the user. This is a similar approach to that adopted by other low-cost carriers, including Republic Wireless which has an MVNO arrangement with Sprint. In its latest earnings call for Q2 2018, Comcast said that Xfinity Mobile ended the quarter with 780,000 customer lines (up from 577,000 in Q1 2018 and ending 2017 at 380,000), with 204,000 of those added during the quarter.

Charter/Spectrum Mobile

Launched in July 2018 and closely resembling Xfinity Mobile, Charter’s Spectrum Mobile also uses Verizon’s network under an MVNO agreement and uses its own network of Wi-Fi hotspots. Only Charter/Spectrum residential Internet customers can sign up for Spectrum Mobile.

Both companies hope that the new wireless service, bundled with its existing services, will increase customer retention and minimize cord cutting as users move away from linear TV. By offering a low-cost Wi-Fi-first mobile offering, the company plans to attract subscribers away from traditional MNOs.

In an industry first, Charter recently introduced its next generation Spectrum Wi-Fi router based on 802.11ax technology. This is the latest generation of Wi-Fi which increases Wi-Fi throughput, allows for more concurrently connected devices, improves battery life for those devices, and improves Wi-Fi coverage in the home. It is seen as another way of making Wi-Fi act more like cellular, with multigigabit speed and capacity very similar to that expected from the upcoming 5G technology planned by the MNOs. This is an important difference since, according to Charter, its Wi-Fi network serves 280 million wireless devices with 80% of smartphone data transiting Charter’s network. This means that, if the subscriber spends more time on the Wi-Fi network, for Spectrum Mobile the cost of providing smartphone service is reduced since less time is spent on the Verizon network, and therefore, the service becomes more profitable.

Altice USA

One of the nation’s largest broadband and video service providers, Altice USA provides Internet, TV, Wi-Fi, and phone products under its Optimum and Suddenlink brands.

Altice USA plans to become a wireless carrier in collaboration with Sprint, and in return Sprint will use Altice USA’s network to help improve its service. Altice USA gets unrestricted use of Sprint’s network for nationwide voice and data services, and Sprint gets access to Altice’s broadband network as it works to significantly densify its network with small cells and other solutions, including the Sprint Magic Box, AirPoles, AirStrand mounts, and repeaters. Sprint holds more spectrum than any other U.S. carrier, and its holdings will enable Altice USA to rapidly build a wireless business.

Altice USA has not announced its go-to-market plans for its new mobile service, so there are still open questions on whether it will base the service within its existing footprint and only bundle it for its broadband customers like Comcast/Xfinity Mobile and Charter/Spectrum Mobile. According to the company, Altice Mobile is on track to launch in 2019 with 4G LTE and VoLTE services. The company also continues to upgrade and expand its Wi-Fi network and test 3.5 GHz CBRS (Citizens Broadband Radio Service) equipment, which may be useful for additional capacity.

These moves by Comcast and Charter are a competitive response that helps them retain Internet customers and prepare for 5G that could enable MNOs such as Verizon with its upcoming Fixed Wireless Access (FWA) service later this year compete with them for residential broadband customers.

5G is coming soon, and these companies view the FWA plans of companies like Verizon as a threat which could ultimately cost them subscribers. That is why Charter’s move to introduce 802.11ax Wi-Fi is a signpost that 5G will be a battleground.

In the diagram (shown above) from the Wireless Broadband Alliance we can see that the evolution of Wi-Fi is very similar to that of cellular. Many of the same techniques are being adopted as both Wi-Fi and cellular strive to meet the same demands of throughput, latency, and connectivity that are demanded by the marketplace and that are represented by the IMT-2020 performance targets. The diagram shows that Wi-Fi based systems can meet or exceed the IMT-2020 targets. Area traffic capacity with 802.11ad and latency with 802.11ax are superior to IMT-2020. Network efficiency values are below the IMT-2020 target. Also, mobility support is much less than the 350 km/h target defined by IMT-Advanced. As a result, 802.11ax can approach the 5G user experience in the vast majority of scenarios.

While the jury is out on the adoption of 802.11ax and 5G indoors and outdoors, the promise is that in many situations 802.11ax can provide a user experience consistent with 5G. If this is the case, we can expect a very rapid and relatively inexpensive rollout from the cable MVNOs.

The advent of 5G is likely to increase the competition for subscribers between the MNOs and these “wireless cable” providers as the cable companies leverage their considerable advantages in hybrid fiber coax (HFC) installed base for densification, backhaul, and fronthaul.

It will be interesting to see if Charter’s Spectrum Mobile and Altice USA’s Altice Mobile will embark on a successful growth strategy—as Comcast’s Xfinity Mobile seems to have done—and how the MNOs will respond to it.