US Cable Operator Challenges Cellular
Cablevision — a US cable operator providing pay-TV, broadband and fixed voice services in the New York City region — has announced a Wi-Fi mobility service. In theory, the news means the cable operator will compete against wireless providers like AT&T and Verizon. Cablevision’s service, Freewheel, will cost current Cablevision Optimum customers $10 per month for unlimited Wi-Fi-only mobile access. The monthly cost is $30 for new users, and there’s no annual contract. Freewheel will initially only work with Motorola’s Android-based Moto G, which will cost subscribers $100.
CCS Insight expected this: in 2014, we predicted that at least one US cable operator would launch its own mobile service in 2015 with offers of quad-play services to stem customer losses (see CCS Insight Predictions for 2015 and Beyond). Cablevision currently has about 3.15 million households as subscribers, but has suffered the loss of tens of thousands of customers per quarter during the past year.
In reality, Cablevision’s new service is unlikely to have much of an immediate effect on incumbent wireless providers. Cablevision already offers its subscribers complimentary access to more than 1 million Wi-Fi access points in the New York region, and access in other parts of the US through partner networks. The company has also been piggybacking on some of its customers’ WLANs via the use of dedicated routers to expand coverage.
Cable operators employ clever methods to patch together a useful unlicensed spectrum network, but such services will face challenges competing with the connectivity quality of major operators. A recent spectrum auction by the Federal Communications Commission brought in a record $45 billion for the US government, confirmation that wireless operators don’t believe they can rely on Wi-Fi to satiate the growing demand for mobile data.
The pricing of Cablevision’s Freewheel service is marginally competitive but certainly not groundbreaking. CCS Insight estimates the average revenue per T-Mobile USA subscriber to be $36; for AT&T, it’s $44. Boingo — a wireless operator specialising in providing Wi-Fi access — has unlimited plans starting at $5 per month. Cablevision’s service is unlikely to attract many new subscribers, though its $10 service could find a niche among its more stationary customers (students, for example).
There’s a level of cross-pollination between WLAN and cellular services like LTE. Cable operators such as Cablevision and Comcast are looking to Wi-Fi as a mobility starting point, while cellular providers like AT&T and T-Mobile are utilising Wi-Fi to lighten the burden on their networks. Multimodal access is gaining.
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