Consumers who rely solely on smartphones for internet connectivity could get Charter’s Spectrum mobile and home wired broadband for the same price, said Charter CFO Chris Winfrey at an investor conference today.
Key to Charter’s ability to make this claim is the company’s use of a Wi-Fi First approach that puts 80% of customers’ wireless traffic onto lower-cost Wi-Fi facilities, with only 20% traveling over the cellular network, Winfrey explained.
Spectrum Mobile Economics
According to Winfrey, consumers pay $130 to $150 per month, on average, for cellular service for two smartphones. An equivalent Spectrum Mobile service from Charter would cost just $73, assuming one of the two smartphones belongs to a heavy user, while the other is a lighter user, Winfrey explained. The hypothetical customer could add 200 Mbps broadband service from Charter for $65 monthly, spending a total of just $138 to get wired and mobile broadband, he said.
“They can save money and we put them on a better [wireless] network because they are not constrained to 20 gigs [gigabytes per month],” said Winfrey.
According to Winfrey, the primary goal of the Charter wireless offering is to drive internet sales, suggesting that the company will be seriously pursuing the smartphone-only market with combined mobile and wired broadband.
For now, all this is hypothetical, as Charter did not promote it wireless offering – launched earlier this year — until this week. Charter initially did not offer iPhones, one of the two most important smartphone brands, but now that the devices are in Charter’s smartphone portfolio, the company will be marketing its wireless service more aggressively, Winfrey said.
Fellow cable operator Comcast already has a track record for its Xfinity Mobile Wi-Fi First wireless offering, launched in 2017, however, and that track record suggests there is a market interest for this type of offering – although it is not clear how much business the company is picking up from smartphone-only customers.
Moving forward, Winfrey sees Charter evolving its wireless network to be less reliant on the cellular service that it leases from Verizon for the 20% of traffic that doesn’t travel over Wi-Fi, either because Wi-Fi is not available in an area or not of suitable quality.
Charter is considering using licensed and unlicensed spectrum to augment its wireless capability, Winfrey said. He noted that the 3.5 GHz and 3.7-4.2 GHz spectrum bands were of particular interest. Comcast also has demonstrated interest in the 3.5 GHz band, having conducted trials of fixed and mobile wireless service in the band.
Winfrey said he also expects ongoing improvements in Wi-Fi technology to help minimize Charter’s reliance on leased wireless service.
He made his comments at the Bank of America Merrill Lynch Media, Communications and Entertainment Conference in Beverly Hills, Calif today, which was also webcast.