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Comcast and Charter Have Reached ‘Clear Relevance’ in U.S. Wireless, Analyst Says

MoffettNathanson analyst Craig Moffett said cable operators are relevant in the U.S. wireless industry.

Titling his quarterly “Wireless Q3 2019” report, released Thursday, “Cable Starts to Matter,” Moffett noted that Comcast and Charter have acquired around 2.5 million wireless users since launching their respective mobile services. And notably, adding in the contribution of Altice USA’s nascent service, cable has accounted for 31% of total U.S. pre- and post-paid additions in each of the last two quarters.

“That market share gain, which is almost certain to accelerate, has already been enough to alter the competitive dynamics of the wireless industry,” Moffett wrote. “Total phone growth for the carriers is now unmistakably slowing. It is unclear whether consensus expectations for the Big Four will accommodate the combination of slowing market growth and falling market share.”

Notably, as the interjection of the cable competitive dynamic begins to impact Verizon, AT&T, T-Mobile and Sprint, “AT&T has signaled its willingness to at last become an arms dealer,” the analyst added.

Indeed, AT&T CEO Randall Stephenson indicated on a recent conference call that his company might enter the MVNO market, ushering other cable operators into the wireless business in the same way, say, Verizon has enabled Comcast and Charter.

Paying Verizon around $3.50 a gigabyte to use its network, the top two U.S. cable operators are currently constrained in terms of just how aggressive and disruptive they can be. But as other MVNO options enter the market—and Comcast and Charter build out their own infrastructure—the Verizon MVNO deal looks like only a “beginning” for the two companies, Moffett said.