Cable MVNOs Subscribership Continues to Climb in 2023

Cable wireless mobile virtual network operators (MVNOs) are effective intermodal competitors in today's communications marketplace. An article published in Fierce Wireless on October 27 of this year summarizes third quarter growth in cable MVNO services by the two largest services, Comcast's Xfinity Mobile and Charter's Spectrum Mobile:

Comcast yesterday reported the company added 294,000 wireless lines in Q3 2023. Comcast now has 6.2 million wireless lines in total. In contrast, Charter today reported it added 594,000 wireless lines in Q3, bringing its total wireless lines to 7.2 million.

My August 1 blog post observed that in the second quarter of 2023, Xfinity Mobile gained 316,000 lines and Spectrum Mobile gained 648,000 lines. 

 

Significant growth potential remains for both cable MVNO services within their respective geographic footprints. And as noted in the Fierce Wireless article, the cost-efficiency and competitiveness of those services is likely to improve in the near future as a result of buildouts of their own wireless infrastructure using small cells and licensed CBRS spectrum. Deployment of such networks as well as increased offloading of mobile traffic onto cable MVNO wi-fi networks, will make hybrid cable MVNOs less and less "virtual" and make their services less costly to provide by reducing their reliance on leasing wholesale access to mobile cellular networks. 

 

Importantly, the mobile broadband choices offered by cable MVNO services did not exist when the FCC imposed public utility regulation on mobile broadband Internet access services in the 2015 Title II Order. That order proffered "switching costs" for mobile broadband consumers and supposed incentives and ability by mobile providers to unreasonably discriminate against their own subscribers as supposed justifications for imposing public utility regulation. Commentsfiled with the FCC by the Free State Foundation in July 2017 explained that those rationales were not persuasive. In late 2023, competition from cable MVNOs further undermines those rationales for imposing public utility regulation. Any wireless provider that blocks or throttles their own subscribers' access to legal content via the Internet or otherwise unreasonably discriminates against their own subscribers risks massive loss of subscribership. Instead of foisting new regulatory restrictions on mobile broadband providers to address non-existent harms, the Commission should maintain the pro-market, pro-investment, and pro-innovation federal light-touch policy set forth in the 2018 Restoring Internet Freedom Order. 

Cox Mobile Gives Consumers Another Choice for Wireless Services

On January 5, Cox Communications announced the launch of Cox Mobile. The mobile virtual network operator (MVNO) service is available to its Internet subscribers in Cox's geographic markets. It is reported that Cox Mobile harnesses over 4 million Cox Wi-Fi hot spots in combination with Verizon's 5G cellular network.

As pointed out in blog posts from May, September, and October 2022, consumer adoption of cable wireless MVNO services that are bundled with fixed residential cable broadband Internet access services continues to grow. The launch of Cox Mobile is another indicator of the competitiveness of the wireless marketplace. Consumers living in Cox's footprint will now gain an additional choice for mobile wireless services. 

Notably, these hybrid-model cable wireless MVNOs are not mere resellers. They rely, in substantial part, on their own network facilities. And it is widely expected that these competitive cable wireless MVNOs will put more of their own licensed spectrum into use and thereby reduce their business costs for leasing wholesale access to mobile cellular networks. In 2023, it will be interesting to watch the technological development of these emergent services as well as consumer responses.  

Cable Mobile Wireless MVNOs: 8.4 Million Subscribers and Counting

A September article by Jeff Baumgartner at LightReading spotlights the continued growth in wireless services offered by cable mobile virtual network operators (MVNOs) offered by Comcast's Xfinity Mobile, Charter Communications' Spectrum Mobile, and Altice USA's Optimum Mobile. According to the article, at the end of the second quarter of 2022, those three cable MVNOs added a combined 703,000 mobile lines for a total of 8.4 million. Although that figure reportedly amounts to less than 3% of the U.S. mobile wireless market, the article cited a MoffettNathanson estimate that cable MVNOs gained almost 44% of net mobile adds for that quarter. And the 8.4 million figure for cable MVNO subscriber lines is up from the 6.5 million total from a year prior that was noticed in my August 2021 blog post.  

The LightReading article is particularly interesting because it highlights an analysis of mobile postpaid plans by categories by Navi. According to the article, "Navi's Q2 2022 Wireless Plan Scoring Report" apparently ranks Spectrum Mobile the highest among competing mobile providers in the entry-level and value categories, with Xfinity Mobile also performing strongly in the value category. As the article observes, cable MVNO services are offered in discount bundles with residential cable broadband Internet access services. 

My blog post on May 2 of this year noted that Comcast and Charter are looking to expand their Wi-Fi and cable network offloading capabilities to more cost-effectively provide cable MVNO services. Added to that intriguing development is Cox Communications' August 29 announcement of its launch of a three-city pilot for its Cox Mobile MVNO service. Suffice to day, the continued growth of cable MVNO networks will likely remain interesting to watch in 2022 and beyond. 

Cable Mobile Wireless MVNOs: 6.5 Million Subscribers and Counting

Over the last few years, Free State Foundation scholars have taken note of the potential competition in the mobile wireless market from entrant cable providers, including Comcast's Xfinity Mobile and Charter Communications' Spectrum Mobile. These cable mobile virtual network operators (MVNOs) combine their broadband network capacity and mobile hotspots with leased spectrum. For a helpful summary of the latest reported numbers, see the July 30 article by Diana Goovaerts in FierceWireless titled "Cable MVNOs add 550,000 wireless subs in Q2." According to the article, cable providers now have a combined total of 6.5 million mobile wireless subscribers. At the end of the first quarter of 2020, there were about 2.5 million combined subscribers. And at the end of the second quarter of 2019, there were about 2.1 million. These cable wireless MVNOs now offer 5G services. At some point, cable wireless MVNOs may be offloading mobile traffic onto their own licensed spectrum in select areas, thereby saving spectrum leasing costs. Expect to hear more about competitive cable MVNOs in the time ahead. 

Cable Wireless Service Entrants Poised to Increase Market's Competitiveness

Yesterday, Free State Foundation President Randolph May and I filed public comments with the U.S. Department of Justice regarding its proposed settlement for the T-Mobile/Sprint merger. Our comments addressed the dynamic communications market context of the proposed merger, including existing and potential competition to wireless carriers: 

Wireless market entry by Comcast and Charter Communications using hybrid Wi- Fi/cellular mobile wireless networks further diminish the likelihood of significant price increases or other anti-competitive conduct post-merger. Traditional cable operators are established providers of bundled voice, video, and data services. They are well suited to provide competitive mobile wireless services by leveraging their existing broadband network capacity and nationwide deployment of Wi-Fi hotspots and leasing network capacity for out-of-area voice and data transmission. As of the second quarter of 2019, Xfinity Mobile reportedly served 1.6 million subscribers and Spectrum Mobile reportedly served 518,000 subscribers. Those subscriber numbers are widely expected to increase. 

Close attention ought to be paid to future subscriber numbers for both cable wireless entrants. But there are other indications that these new entrants will further increase the market's competitiveness for mobile wireless services. According to reports, Xfinity Mobile and Spectrum Mobile are both increasing mobile data traffic offloads from leased Verizon network capacity onto their cable Wi-Fi networks. This competitive strategy reduces their lease payments. Also, both Xfinity Mobile and Spectrum Mobile reportedly have plans in the works to offer 5G wireless network services in future. And the largest multi-regional wireless carrier has reportedly acknowledged publicly competitive pressures by cable wireless entrants. 

(H/T to LightReading's Mike Dano for his incisive reporting and analysis.)