The U.S. cable industry has found itself in a bit of a pickle recently. Squeezed between proliferating fiber footprints and the newfound popularity of fixed wireless access (FWA) offerings, cable broadband net additions flatlined in Q2 2022 and came in at anemic levels in Q3. But while there’s been plenty of speculation about cable’s future prospects, it seems operators are looking to wireless products to help them regain the upper hand.
Richard Lang is a managing director and global head of Cable at Afiniti, a company which provides contact center AI technology for operators. However, the majority of his career was spent working for big names in the cable industry. After starting out as a Marketing Director at Cable One back in the mid-1980s, he became corporate VP of marketing at Charter Communications and later spent nearly 17 years at Comcast, ending his tenure there in late 2019 as EVP of Sales and Marketing for the company.
In an interview with Fierce, he explained cable operators long enjoyed a market advantage as the companies with the highest-speed broadband product around and thus had pricing power. But with the spread of fiber – and to some extent, FWA – that speed superiority has diminished. And in an inflationary environment, that means it’s harder for cable companies to raise prices on customers who already think they’re paying too much.
So, what’s an operator to do? Well, Lang said there are a few different moves onlookers can expect to see cable companies make. For instance, he predicted they’ll raise the speeds available on their different service tiers to increase the perceived value of their service. He noted many already did so during the pandemic, but may have to do so again as consumers once again let their eyes start wandering. As one might expect, Lang also suggested operators might turn to technologies like the AI Afiniti provides - which pairs customers with contact center agents based on the likelihood they'll have a successful interaction - to capitalize on the shrinking number of jump balls available to them.
"Every interaction is critical," he said. "A ton of growth buries a lot of sins. It's one of those situations where now each one of those interactions becomes so much more valuable to an entity to make sure that you maximize that opportunity to absolutely the highest degree that you can."
But he tipped their major play to be a new bundling strategy that pairs fixed and mobile service with additional offerings like enhanced Wi-Fi and home security. It’s that wireless element that will give cable players like Comcast and Charter the leg up, as many fiber players like Frontier Communications, Ziply Fiber, Lumen Technologies and MetroNet don’t yet offer mobile service. And those that do – like the AT&T, Verizon and Altice USA – don’t yet have fiber footprints anywhere near comparable to cable’s expansive reach.
“What you’re seeing now is a lot of the bigger providers are starting to look at what can we do from a bundle perspective, making it more financially advantageous for people to get a suite of services,” Lang said.
Indeed, earlier this week, Charter pointed to wireless as a key driver of growth and broadband penetration going forward. And leading its product charge is the operator’s Spectrum One bundle, with brings together fixed and mobile service as well as advanced Wi-Fi.
As New Street Research put it “they see their primary differentiation as being able to offer a truly integrated bundle, at a compelling price, across their entire footprint. They believe that with advanced Wi-Fi and CBRS, they will offer a better product than peers at a better price.”
There’s a catch though, given the two biggest fixed wireless players – Verizon and T-Mobile – also offer nationwide mobile service. So, to maintain their bundle advantage, Lang said cable players will begin ramping up the rhetoric against FWA.
“In the nascent stage of fixed wireless, there are coverage issues, there are demand issues. So what you’ll see, and I think you’ll see this fairly soon and there’s already some out in the marketplace, the larger providers will talk about…it’s not great,” he said. “What you’re seeing is some of the bigger incumbent providers starting to do some advertising, which tell you they want to address this.”
Indeed, LightReading reported in October that Comcast launched an ad campaign and an entire website dedicated to deriding fixed wireless access technology.
Cable players are also trying to limit the claims fixed wireless players can make about the technology as well as how much they can criticize cable. In March, Charter challenged a T-Mobile FWA ad campaign on the grounds its speed claims and statements about cable’s “exploding bills” were misleading. Charter later sparred with T-Mobile again over the claim that the latter’s service cost 50% less than the cable operator’s. The advertising industry’s self-regulatory body recommended in August that T-Mobile change its ads.
This story has been modified to add an additional comment from Lang from the interview.