What's Next for Cable Operators in Their Wireless Future?
The major cable companies Comcast, Time Warner and Cox Communications, recently dropped out of their previously highly-touted Pivot joint venture (JV) with Sprint. This is due to the fact that they could not offer a differentiated service, could not effectively bundle wireless with the rest of their product line, and were essentially competing with the Pivot branded JV.
The three cable companies mentioned above are part of a consortium that also owns AWS spectrum, but lacks a full nationwide footprint. In addition, Cox Communications owns additional spectrum at 700MHz in the southeastern United States. These companies are in discussion with Clearwire, Sprint, Intel and some equipment manufacturers concerning a JV using WiMAX. Comcast has even recently hired a wireless industry veteran. Dave Williams from O2 in Europe, to be its senior vice president of wireless technology.
A couple nice pieces of material and a little flash do not make a $1,000 suit. While these cable initiatives, spectrum investments and hirings seem to point the way to continued interest in and planning for some sort of wireless play, Gartner believes much more is needed.
To be a viable player in this market, U.S. cablecos are going to have to bite the bullet and separately own a wireless company that must be on the same page as them in terms of strategy and direction in the market. They are also going to jump into the industry quickly, because it is already very mature. That means purchasing an existing wireless provider (T-Mobile, Sprint, or the combination Alltel/U.S. Cellular/Leap/MetroPCS) because what they have now will not give them the needed resources to compete effectively. Cable has procrastinated about making a big move into wireless, but time's a wasting, and if they want to get in this market in any meaningful way, they are going to have to write a big check.