The Cablecos’ Various & Sundry Wireless Plans
17 May 2008- Cox and Cablevision Have Their Own Wireless Plans, the Latter Reviving Wi-Fi Mesh
- Charter and Mediacom Leaning towards Joining Clearwire Group
The following analysis is excerpted from a Wireless Watch report. To get a free copy of the complete report, please e-mail paperboy@riderresearch.com with your name and the name of your company and ask for Wireless Watch 256.
In the wake of the creation of the “new Clearwire,” the WiMAX joint venture between Sprint Nextel and the original Clearwire, both partners announced big quarterly losses, but amid a climate of opinion that was turning in their favor, with some analysts even predicting a Sprint turnaround this year. Meanwhile, the cablecos that were not included in the Clearwire venture - which is backed by Time Warner, Comcast and Bright House, as well as Google and Intel - were trying to reassure investors that they do have wireless strategies of their own, with Cox taking a risk on building its own network; Cablevision (like T-Mobile USA) turning to Wi-Fi; and Charter hinting that it would welcome an invitation to join Clearwire.
While participation in Clearwire looks like a clear plus for the three cableco partners, offering a relatively low risk, low cost route to wireless and the quad play, some are determined to plow their own furrows ? even Cox, which was formerly the fourth cable member of the first Sprint partnership, Pivot.
Cox is now looking to take the huge risk and investment of building its own network in the 700MHz spectrum it bought in the recent auction, a venture about which it remains secretive so far, and in which its shareholders may well be hoping it will recruit network partners of its own, with T-Mobile a possible candidate.
In a recent research note, UBS said Cox would spend “less than $100 million a year” on building out CDMA and later LTE, using kit from Huawei. It owns 14 regional licenses covering most of its cable territory and beyond, but would need a roaming deal with another CDMA operator to gain national and international services - which could bring it back to Sprint Nextel.
Cablevision is taking an approach that sounds almost retro, given the recent disappointment in wireless mesh as the basis for metrozone networks to challenge incumbent telcos and potentially provide a partner network for cablecos. The New York and Connecticut provider plans to erect a Wi-Fi canopy over its entire footprint, as a wireless overlay to its HFC network, a project that will take two years to complete. It will then offer free wireless access to its data subscribers, an approach already adopted in assorted variations by some DSL operators, like AT&T, and even cellcos, like T-Mobile.
However, these bundles of free wireless with broadband or mobile services have mainly relied on a network of hotspots, which may be variable in coverage, while by building the Wi-Fi itself, Cablevision is guaranteeing access throughout its territory - though of course, this will not provide the benefits of mobile roaming outside the zone for traveling subscribers, unless it signs roaming deals with a major Wi-Fi operator like T-Mobile USA.
There is logic to its thinking, though most broadband operators that have relied too heavily on Wi-Fi rather than true mobility have seen marginal benefits (example, British Telecom). However, half of Cablevision’s TV customers are already broadband Internet subscribers and half of these users already have Wi-Fi in their homes.
With free wider area Wi-Fi access available, Cablevision has removed one major incentive for these customers to buy a mobile broadband package from Verizon or AT&T. And the cost and risk is far less than that of Cox or Clearwire ? Cablevision estimates a cost of $70 per home passed to support 1.5 Mbps Internet and voice. However, it will also have to cope with the quality of service issues that are inherent to Wi-Fi because of its unlicensed spectrum, however well planned and controlled the mesh.
For vendors, this will be a welcome revival of interest in carrier class Wi-Fi mesh, and likely suppliers could be Motorola, already well established among cablecos through its set-top boxes; Cisco, which has the Cable ServiceMesh platform; or a start-up such as BelAir, which created a cable technology advisory committee in 2006 to develop wireless networks optimized for integration with hybrid fiber/coax networks.
With many of the cablecos fighting hard to achieve a quad play and protect their bases from the onslaught of the telcos, Charter Communications is still weighing up its options. It seems likely to go for partnership rather than build-out, but CEO Neil Smit, speaking at a first quarter results conference call, would only say: “We will continue to test our way into it, and try to determine what offering ? whether it’s voice or broadband or any other offering the consumer accepts well. We are working on some different relationships.” He also said Charter would be “running some tests” related to Clearwire connection. “We are looking into that, but at this point, we have not been approached… as to a partnership.”
By contrast, Mediacom Communications’ CEO Rocco Commisso said last week that it was “just a matter of time before we get involved” with Clearwire.
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