{"id":31703,"date":"2023-08-13T15:51:39","date_gmt":"2023-08-13T19:51:39","guid":{"rendered":"https:\/\/wadesarver.com\/Podcast\/?p=31703"},"modified":"2023-08-13T15:51:40","modified_gmt":"2023-08-13T19:51:40","slug":"frenemies-cablecos-and-mnos","status":"publish","type":"post","link":"https:\/\/wadesarver.com\/Podcast\/2023\/08\/frenemies-cablecos-and-mnos\/","title":{"rendered":"Frenemies: Cablecos and MNOs"},"content":{"rendered":"\n
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I hear a lot of talk about Cable companies, (Cablecos), competing with Mobile Network Operators, (MNOs). This makes the Cablecos Mobile Virtual Network Operators, (MVNOs). I think what most people in the industry know is that they are working together. It\u2019s a partnership that makes them frenemies. But who needs whom?<\/p>\n\n\n\n

The One-sided Love Affair:<\/h2>\n\n\n\n

Cablecos rely on the carriers\u2019 networks for their mobile plans. Comcast and Charter rely on Verizon for their mobile network.<\/p>\n\n\n\n

What I don\u2019t see is where the MNOs need the Cablecos which makes it a one-sided love affair. Sure, Cablecos added a lot of mobile subscribers in a short period of time, but let\u2019s face it, they\u2019re not new subscribers, are they? We didn\u2019t just see millions of people pop up without mobile service, did we? Of course not. They came from the MNOs. I would find it hard to believe that someone who had cable and internet one day realized they needed a smartphone. Possible, but not likely. <\/p>\n\n\n\n

People migrate to Cablecos for mobile service because it\u2019s cheaper and they offer another bundle. That\u2019s right, yet another bundle all in one bill. One thing Cablecos do well is marketing to their locked-in subscribers. Can you go a day without an email, commercial, or billboard pushing their mobile plans? Comcast has shoved their mobile plans down my throat. It appears to be working because they\u2019ve added tons of mobile subs<\/a>.  <\/p>\n\n\n\n

Is it true growth? Subscriber penetration in the States is pretty high. I don\u2019t know what else the carriers can do to increase subs for mobility. We see Cablecos stealing mobile customers, I\u2019m sorry, shifting<\/em> customers away from the MNOs. This may not be bad for the MNOs! Why? Because they aren\u2019t losing so much as they are shifting and possibly gaining. They are losing some revenue when a customer goes with any MVNO, but it\u2019s not all bad. I believe they have a strategy. <\/p>\n\n\n\n

Let\u2019s look at Verizon. I would bet they lose customers to Comcast and Charter, meaning less revenue for Verizon but they still get money from their MVNO Cablecos. It\u2019s not totally lost revenue, just a small decline when Cableco takes its margin away from Verizon. Verizon\u2019s dream would be that Cablecos are stealing subs away from AT&T and T-Mobile. Lose 2 to gain 4, something like that. It\u2019s a strategy that seems to be working. However, the MNOs still have tons of stores everywhere which means they didn’t learn a thing from the MVNOs. Some people love the stores, but they are a huge cost. That\u2019s another article.<\/p>\n\n\n\n

Now, we see Cablecos shifting customers away from the MNOs, hence the one-sided love affair. What can the MNOs do? Don\u2019t cry or pout for the MNOs, they have a plan. <\/p>\n\n\n\n

It\u2019s to be the frenemy of the MNO by stealing fixed customers away by creating something new, like fixed wireless access, FWA. This is a new market, more or less, for MNOs. <\/p>\n\n\n\n

Truth be told the MNOs offered this for years, but now they\u2019re creating new services with more bandwidth than ever. They are finally able to compete with other fixed broadband ISPs, like Cablecos. <\/p>\n\n\n\n

Oh, a note to all of you smaller wireless ISPs in major markets, make a choice. One – you can retreat to the poorer neighborhoods or out to the poorer coverage areas. Wherever the MNOs will limit investment into their network. Two – you can lower your costs to $10 or $15 a month and hope for the best. Three – just wait until they come and steal your customers, making them work for it before you quit. I know you think your customers are loyal but don\u2019t get hurt if they bail. <\/p>\n\n\n\n

Back to the point.<\/p>\n\n\n\n

Why do you think MNOs are relying on FWA? Where else will growth come from? They intend to steal customers away from Cablecos. They also want to get the very mobile younger generation to literally cut the cord and use their FWA bricks instead of an attached cable box. The ones that want to cut the cord may be able to do it with a brick. <\/p>\n\n\n\n

Remember when I said the love affair was one-sided? This is what I meant. MNOs need to increase subs for this 5G network where they spent billions on spectrum, equipment, and deployment. <\/p>\n\n\n\n

Wait, but why?<\/h2>\n\n\n\n

OK, I mentioned mobile subs going to Cablecos. This makes sense because in spite of how they treated their customers over the last 10 years, the MNOs didn\u2019t do much better. They have a lot in common in that respect, am I right?<\/p>\n\n\n\n

Think about it, how often do you get your mobile or cable bill to see charges that outrage you? With MNOs, it\u2019s usually overages. With Cablecos it’s usually some new fee or a subscription you thought was free. Either one can set you off when you get the bill. <\/p>\n\n\n\n

Don\u2019t deny it, you know there was a time you went nuts looking at the bill!!<\/em><\/p>\n\n\n\n

How many times have you called either one to complain and all they do is make you sign up for more crap? How many times do they say there\u2019s nothing they can do, but they have something new or a new bundle that you don\u2019t want but you sign up for it because you think it\u2019s a better deal? I can\u2019t believe it\u2019s just me. I mean they can convince you that your plan is the best and cheapest bundle, which deep down, I feel they\u2019re full of crap. <\/p>\n\n\n\n

My point is, Cablecos and MNOs have treated their customers with little respect in the past. Sure, the customer service rep is sweet and nice and oh-so-helpful but is really selling you on a new bundle. <\/p>\n\n\n\n

This is why we had a rise in MVNOs, (Mint and Visible), along with streaming choices, (Netflix and Amazon). They did what they said they were going to do.<\/p>\n\n\n\n

How little respect did MNOs give their subs? So little that they are losing their subs to MVNOs that literally use the MNOs network. It may be cheaper and they won\u2019t hit you with data usage overages. Not yet anyway. Most MVNOs have packages that make sense, not what MNO corporations sat around in a conference room for the last 6 months with a team of CFOs and Legal to build a contract that you will never read but hate all the same. You know I\u2019m right about this!!<\/em><\/p>\n\n\n\n

Now, imagine the same scenario, but with Cablecos and streaming service providers. Cablecos piss you off because of all the hidden fees. Do you think Amazon and Netflix passed them because they were a pain in the ass? No!! Spoiler alert, they treat their customers way better, have a lower barrier of pain to make changes, and they don\u2019t screw you over when you call them for help. Also, they let you package things the way you want. I don\u2019t have to sign up for an Alaskan sports network if I want to watch my local sports network for some freaking high fee. <\/p>\n\n\n\n

Sure, when you call the MNOs and Cablecos for customer service they\u2019re nice, but then their directive is to get you to pay more whereas MVNOs and streaming providers are looking for ways to have flat fees and a simple shopping cart. That means letting you look online, compare, and then make your own decision. <\/p>\n\n\n\n

Simple versus complex. Plans made by normal people versus corporate boardrooms. Flat fees or complex contracts with crappy loopholes. <\/p>\n\n\n\n

OK, now that we understand why the ground has shifted and that the MNOs and Cablecos do own their respective networks, their playgrounds are not what they once were.<\/p>\n\n\n\n

FYI- MNOs own Cablecos mobile networks, will this be a problem in the future?<\/p>\n\n\n\n

Cableco Shift<\/h2>\n\n\n\n

Meanwhile, Cablecos are constantly improving their networks as they shift from being entertainment providers to Internet Service Providers, and ISPs. While you may think this is hurting them, I believe in the big picture it will offload so many costs and problems.<\/p>\n\n\n\n

Did you ever lose a network because of some stupid argument over costs between a network and a provider? This used to be headline news when a network would go off a cable network or satellite network right before a big football game. <\/p>\n\n\n\n

Back to business. <\/p>\n\n\n\n

Cablecos are in a solid position to hold on to their customers for a very long time since they are wired to them. The local governments paved the way for these companies to have monopolies for years. Up until the last 10 years or so, no other companies could get in to build anything new in Cablecos territories. Comcast has a pretty solid hold in many areas.<\/p>\n\n\n\n

However, now Cablecos have to constantly upgrade their bandwidth thanks to the competition. They are being pressured into competing with the competition just to hold on. And their new competition is their own Frenemy, the MNO. <\/p>\n\n\n\n

What about the wired competition? Unfortunately, today it is so expensive to run beside these companies. We all know that Verizon, AT&T, and Google all tried to compete as local ISPs, but it was so expensive to move into a market and hope to get a 30% share. Competition is almost as fierce as the legalities of moving in. <\/p>\n\n\n\n