Charter`s Mvno Agreement With Verizon Wireless

December 5th, 2020 4:43 pm

“They would have solved the wireless issue without the billions of tens of billions of dollars in spending that would be tied to either a heavy and risky takeover or, worse, a de novo buildout,” Moffett wrote. “And Verizon would benefit as well, because every customer that bought Comcast and Charter would be a wholesale Subscriber to Verizon.” Charter Communications asked Verizon to activate the MVNO agreement it inherited when it completed the purchase of Time Warner Cable earlier this year. The sector already has an example to build – Altice USA mobile virtual network operator (MVNO) deal with Sprint. Altice is expected to launch its wireless service before the end of the year, but according to Moffett, its profitability is better than the Verizon Comcast charter, since Sprint is allowed to build small cells on the Altice network under Altice`s agreement. Sprint pays nothing to Altice – except construction costs – and in return, the cable company can ride for free on these small cells. The more cells there are, the lower the cost of MVNO. According to Moffett, Sprint has already deployed some 19,000 small cells in the Altice network in greater New York as part of the agreement. In addition, Cox Communications, the country`s third-largest cable operator, is preparing to enter the wireless industry with its own MVNO. “To get from where we get to real mobility, we need to use our Wi-Fi network, we`ll need the relationships we have with MVNOs, and we`ll have to build our network at some point in the future,” Rutledge said. In a May 4 report, Fletcher said that while Verizon is losing mobile customers over Comcast or Charter, there is still some revenue, since both cable companies depend in part on Verizon`s wireless resale. In particular, mobile services use the wifi network of each cable company and an agreement with Verizon through a mobile network operator. Therefore, any mobile use outside the Wi-Fi network results in payments to Verizon from Comcast and Charter. Cable operators continued to expand their mobile business during the first quarter and participate in mobile operators despite facing headwinds from the coronavirus pandemic.

In a blog post, Moffett estimates that if Comcast customers charge 45 $US per month for unlimited wireless service and pay Verizon about US$5 per gigabit per month, the cost of data for the operator alone would be 40 $US per month with very conservative usage of 8GB per month. Add $5 a month for language, and unlimited customers are a loss offer even before SG-A, customer service and acquisition costs are taken into account, the analyst added. And with respect to claims that wireless is an effective exodus reducer, Moffett calls these arguments “really just tie-breaks.” “It`s a pretty elegant solution,” Moffett wrote. “Sprint has a huge advantage over Verizon, AT-T and, if the deal is declined, on T-Mobile. And Altice USA gets an MVNO agreement that, over time, becomes cheaper and cheaper, because more and more traffic is carried by its small common cells. “We told Verizon that we were interested in the MVNO agreement – we asked to activate it. We want to continue this relationship,” said Tom Rutledge, the charter chief, on Wednesday at Goldman Sachs` 25th annual La Communacopia conference. Comcast was also ahead of analyst estimates: With 216,000 net additians exceeded a forecast of 200,000 from Lightshed Management-Partner and telecommunications analyst Walter Piecyk. The number of 2020 increased by 170,000 net figures in the first quarter of 2019. For Moffett, a similar agreement with Altice/Sprint, which promotes the construction of small cells, would be a cheaper way to move towards 5G, and this cost advantage would increase over time. In addition, Comcast and Charter could make money with wireless through a new MVNO agreement, as costs would decrease if cell density improved and the quality of service for customers improved.

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