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Cable's Wireless Strategy

What strategies are being used by North American cable multiple system operators (MSOs) to enter and compete in the wireless market?

To date the most significant strategy has been strategic partnerships.

These partnerships involve:

USA's four leading cable MSOs and Sprint, as well as the g
Go-it-alone strategies of major MSOs, including Rogers Communications and Cablevision Systems.

The cable industry is currently stockpiling wireless spectrum from last year's auctions and are positioning themselves for another round of bidding wars expected later this year or in early 2008.

There is no doubt, the cable industry is preparing for a battle in the wireless market against solid incumbents such as AT&T, Verizon, T-Mobile, and potentially even MSO partner Sprint.

Key Service Providers

key service providers int he MSO battle include:

AT&T Inc
Bright House Networks LLC. - subsidiary of Advance Publications Inc. and Time Warner Inc.
Cable One Inc. - subsidiary of The Washington Post Company (NYSE: WPO);
Cablevision Systems Corp.
Charter Communications Inc. (Nasdaq: CHTR)
Comcast Corp.
Cox Communications Inc. - subsidiary of Cox Enterprises Inc.
The DIRECTV Group Inc.
EchoStar Communications Corp.
Insight Communications Company, Inc.
Mediacom Communications Corp.
Rogers Communications Inc.
Sprint Nextel Corp.
Time Warner Cable Inc.
T-Mobile USA Inc. - subsidiary of Deutsche Telekom T-Mobile International AG
Verizon Communications Inc.

Equipment Vendors

Equipment vendors that stand to gain or lose in the MSO battle include:

Camiant, Inc.
Cedar Point Communications Inc.
Cisco Systems Inc
Ericsson AB
Intel Corp.
MobiTV Inc.
Motorola Inc.
Samsung Electronics Co. Ltd. (Korea)
Scientific-Atlanta Inc - subsidiary of Cisco Systems
Synchronoss Technologies Inc.

For the North American cable industry, the wireless space is proving to be the final frontier, with numerous cable operators gearing up to launch mobile phone services, either on their own or in partnership with strong wireless operators such as Sprint.

Many, if not all, of these cable operators are seeking to offer wireless voice service as the fourth arm of converged media: video, data, and voice services."

With the new mobile capabilities MSO's are adding, cable MSOs plan to introduce a other wireless products, including high-speed data and mobile video, and eventually, integrated home VOIP and mobile phone service. This will enable subscribers to switch seamlessly from one network to the other with one dual-mode handset.

Backing this industry development are recent key industry moves:

Sprint-Cable Joint Venture partners have launched service in 12 markets so far, with about 30 more scheduled by year’s end
Sprint-Cable JV members won 137 licenses in AWS auctions last year, spending nearly $2.4 billion for the rights to almost all their major markets
Other large U.S. MSOs – CableOne and Cablevision Systems – bid separately in AWS auctions, with CableOne taking 30 licenses
Cable operators will likely use new spectrum to focus on wireless broadband and mobile video services, including WiMax and remote DVR programming

Industry Challenges

Cable operators need a deeper understanding of how wireless services can enable them to compete with telecom operators in the next-gen services .

Telecom operators need to assess the full potential competitive threat posed by cable MSOs in the wireless sector

Technology suppliers must assess this market opportunity for cable MSO wireless initiatives

Investors need to better understand the scale of investment that will be required for cable service providers to deploy wireless networks and services, the probable timing of that investment, and the technology suppliers that are best positioned to capitalize on projected wireless spending by the cable sector.