It was March 2013 when we first heard a cable company talk about WiFi Homespots and their potential for cellular offload, and a month later when Comcast chimed in and said that it would build out WiFi to look into that opportunity and partner with Liberty Global from across the Atlantic, in Europe. And yet today there remains no clear service addition at Comcast nor a date on the near horizon for its launch.
We know that it built out its network to establish AAA servers that will allow authentication to any dual mode WiFi-LTE partner network, by installing mostly Alcatel equipment and software. The goal is for the network to work all the time, every time, by adding things like customer self-activation, customer care and another layer of authentication, using the 3GPP Trusted Wireless Access Gateway – all of which equate to instant network scalability. But it had achieved all that by mid-2015, when the real work began in earnest – how could Comcast take on the Verizon-AT&T duopoly in cellular, and be sure it’s efforts would be successful or at least not disastrous.
Another 12 months further on, clues that show Comcast is now hunting down potential recruits who understand how to run an MVNO, seems to mean that it has yet to solve its business problems.
At the recent results discussions, Comcast execs agreed they would “take a paddle” at the forthcoming auction for cellular capacity, when just a few weeks earlier Comcast had been talking up the benefits of taking up its option to get into an MVNO situation, on the back of the last auction it took part in, when it gave up its spectrum to Verizon for cash and the promise of an MVNO.
Presumably any new spectrum that Comcast manages to win at another auction, would end up being used in much the same way – as fodder to attract terms of an MVNO agreement, again at Verizon. Given that it should already have that agreement in the bag, it worries us that Comcast is unsure of its way forward.
The recruits that Comcast seems to be lining up on its own Comcast Careers website are the lead technologist in a mobile technology lab to operate in both licensed and unlicensed spectrum bands, and also a VP of business development strategy with expertise in MVNO agreements and familiarity with GSM, CDMA, LTE, VoIP, VoLTE, iOS and Android.
The point we would make it that it is very late in the day to be recruiting this type of strategic executive, when its network has been ready for almost a year. It looks like Comcast has spent a year prevaricating over what type of service to launch, at what price, with what partner, and still hasn’t made up its mind, so is recruiting someone to help.
Our early suggestions that a Comcast WiFi first service would emerge by the middle of 2014, were corrected by technologists close to Comcast, who told us to “think a year further out,” – and now we are a year past that.
Of course we understand that a company like Comcast does not stand still, and there will have been two or more things staying its hand. It watched as Cablevision rushed into a WiFi First service and perhaps wanted to see how well it went – so far there has been little word on that subject, so we suspect it is not going too well. Secondly Comcast had a merger going on with Time Warner Cable, and potentially, after that was sunk by the FCC, wanted to see who might move for TWC and how Comcast might have to react to that.
This means that it is presumably still waiting, given that the Charter-TWC-BrightHouse Networks deal has not been confirmed by the FCC as yet, although that could be any day and Comcast will need a series of business responses to that.
And finally Comcast was possibly waiting for the forthcoming spectrum auctions, to see that kind of hand it has after it buys a few more cards? We would imagine that by now there are multiple scenarios in play, being modelled by the management team, and although we have always been amazed by how long an opportunity will remain open in technology, we have been surprised that this cable opportunity, along with Liberty Global’s similar one in Europe, have taken so long to mature.
Perhaps the key to that is the 2005 MVNO deal that Comcast and other cable firms did with Sprint, in the ill-fated Pivot venture – with Comcast being keen not to find itself in the same, weak position once again. It will be torn, we know – it won’t want to create a cellular business at the expense of profits, so it will not act as a market disruptor, but if you cannot go in cheap, then why are customers going to transfer to you in the millions?
Meanwhile the number of Homespots in play by Comcast has risen to 13.5 million and will go higher, by our calculations somewhere close to 17 million by the end of 2017. But the opportunity is not wasting, because no-one is building out WiFi at that rate in the US, and it would take years to catch up.
In fact, the only people that might be able to catch up are the remaining US cable operators, if they acted in concert with Comcast, under a common brand, but surely that would look too much like the Pivot brand that went sour at the US cablecos previously, and such an arrangement would not leave Comcast driving its own operations, but partnering.
Finally, there are two remaining issues to be resolved before Comcast takes to cellular in a big way. One is when it the best point in the technology cycle is it best to strike? Perhaps when AT&T and other rivals are already committed to expensive 5G rollouts, so not yet, and also what exactly will LTE-U and LTE-A do to Comcast’s plans and to those of its rivals?
But if Comcast has only begun building its LTE technology team now, it may have already missed that boat, and need to wait for fully-featured 5G.