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Comcast, Charter: Can You Hear Them Now?

MoffettNathanson analyst Craig Moffett has declared cable operators relevant in the U.S. wireless industry.

Titling his quarterly Wireless Q3 2019 report “Cable Starts to Matter,” Moffett noted that Comcast and Charter Communications have added about 2.5 million mobile subscribers since launching their respective services. Factoring in the nascent Altice Mobile service, cable has accounted for 31% of total U.S. pre- and post-paid additions in each of the last two quarters.

Comcast's 'Xfinity Mobile' product

Comcast's 'Xfinity Mobile' product

“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.

Noting that the interjection of the cable as a competitive dynamic has already started to impact Verizon, AT&T, T-Mobile and Sprint, “AT&T has signaled its willingness to at last become an arms dealer,” the analyst said.

Indeed, AT&T chairman and CEO Randall Stephenson indicated on a recent conference call that his company may become a mobile virtual network supplier, ushering other cable operators into wireless in the same way that Verizon has enabled Comcast and Charter.

Giving Comcast and Charter choice beyond Verizon in the MVNO market would change the game.

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.