MoffettNathanson: Cable is a Bigger Threat to Wireless Than Wireless is to Cable

Cable companies’ wireless offerings are a bigger threat to wireless providers than wireless providers’ broadband offerings are to cable companies, according to a new research note from industry financial analysts at SVB MoffettNathanson. It’s a contrarian view at a time when fixed wireless offerings from T-Mobile and Verizon are stealing cable broadband subscribers and the mobile market is heavily saturated. The researchers base their analysis on several key market realities. One of the most critical is that the wireless industry is roughly twice the size of the broadband industry. Exacerbating this, ISPs have a lot to lose in the broadband market, where they currently have about 29% of the market, with revenues of $26 billion. Meanwhile, cable companies have a lot to gain in the wireless market, where they currently have a 2% share, with revenues of $4 billion. The concept of true convergence plays heavily into the analysts’ research. Convergence means more than simply bundling services together, the analysts said. The research note cites two examples of this type of convergence. One example is fixed wireless networks that use mobile infrastructure, yielding a cost advantage in comparison with offering both services over separate infrastructure. The researchers expressed concerns, however, about whether mobile infrastructure can support both services long-term – a concern that others also have expressed. (MoffettNathanson argues, however, that Verizon and T-Mobile fixed wireless access (FWA) offerings may be able to support service in rural areas for a long time.)