Cable’s lack of a clear wireless strategy has been seen as somewhat of an “Achilles heel” for them. After all, their growing competitive nemesis, namely AT&T and Verizon,, have clear wireless strategies and are executing them quite well. The ability to grow the triple play bundle to include wireless (the so called quad play) hasn’t been around long enough to draw firm conclusions about its competitive impact. But most analysts would agree, all things being equal, having a wireless option in your back pocket should prove to create an advantage. The other issue of course is wireless’ role as a growth engine. AT&T and Verizon have it and their triple play cable competitors do not.
All this leads to speculation about cable companies getting into wireless, and quickly. A recent Wall Street Journal article adds to the speculation by reporting that Comcast, Time Warner and Brighthouse are in talks with Sprint and Clearwire to invest significantly in a WiMAX partnership. According to the article, the three cable companies are talking about investing close to $1.7 billion, with Comcast being the lead with $1 billion. One idea suggests that the cable company investment would give them access to wholesale capacity to launch their own branded wireless service. Cox recently signaled their intention to pursue some type of wireless strategy as well by acquiring $305 million worth of 700 MHz spectrum.
While conceivably it makes sense for these companies to partner, it does have a little cloud hanging over its head. After all, these are the same companies that jointly launched the ill fated Pivot Wireless. Will they learn from those mistakes? These same companies are also sitting on a boat load of AWS spectrum. Perhaps they’ll look to leverage that spectrum in this venture, although there is no clear path for WiMAX over AWS spectrum. All this chatter points to a somewhat simple reality. Cable recognizes that it’s probably in their best interest to have a wireless arsenal of some type going forward. It would be a wise hedge against telecom competitors seizing a potential quad play rush. The real question is, can they figure it out fast enough? With wireless penetration exceeding 80% in the U.S. and telecom having such a wide lead, cable risks wireless irrelevancy before they even get going, unless they get going quickly.