The gleam in Rob's eye says he wants to go ahead. "We have more fiber than anyone else," Rob Howald of Comcast claims, adding, "We and all the others in cable have deployed fiber deeply throughout our networks. That will give us a crucial advantage in 5G mmWave." Howald was very clear that no decision has been made to go forward, although he was obviously enthused about the technology. It's not news that cablecos are looking, but I was amazed at how advanced the preparations are.
Balan Nair at Liberty Global, the largest international, a few months ago was deeply skeptical of building his own network. Now, he tells WSJ, "We have fiber to many neighborhoods." Stu Woo points out, "The company has utility cabinets in neighborhoods already connected to power, which would allow the company -- or a mobile-carrier partner -- to quickly set up a 5G cellular site there."
A few days later, I saw Howald hold up a chart of 5G coverage simulations. Their current fiber allows mmWave to more than half the area studied and they are driving fiber deeper. I've confirmed U.S. #2, Charter, is thinking similarly. The final decision is a couple of years away, but the engineers are enthusiastic about the challenge.
Over 100M prime wireless customers are in the sights of the three companies, with further alliances possible. In Canada, both Shaw and Rogers are already working with Comcast on set tops; Shaw has limited wireless today.
Liberty has long offered wireless and quad-play in most markets. Comcast has just turned on their MVNO with Verizon nationwide. Charter is expected to add wireless next year, after they smooth out the acquisition of TIme Warner Cable.
(added) Dave McGuire of Comcast commented,
"Just to be clear, our focus, on the broadband side, remains on rolling out DOCSIS 3.1 across our footprint, which we believe is the most effective and efficient way to deliver ultra-fast speeds to customers.
On 5G, we are testing the technology, but it is way too early to say what role it will play. I think Rob was reinforcing something you’ve heard from our leadership, which is that with more than 150,000 route miles of fiber, our network is well positioned to support a wide range of potential use cases, including 5G backhaul."
I believe I made that clear by bolding, "no decision has been made," and other comments. I have two independent verifications that Comcast is working hard on 5G, one from another cableco and one from a senior industry researcher. I believe Comcast is making sure to be ready, willing, and able to move aggressively on 5G if the business decision is made to go ahead. I infer they are "serious" and remain comfortable with the headline. (end addition with Comcast comments)
The pros and cons of cable 5G wireless:
Brian Roberts of Comcast points to a major negative. "No disrespect to wireless, but it's a tough business. ... I don't see something happening in that industry that we would envy a position that we don't have today." With weak competition from U.S. telcos, cable broadband is extremely profitable and prices continue to go up. Wireless prices are dropping.
Giant cablecos have the bargaining power to demand excellent pricing if they buy services from the telcos. Most telcos have massive overcapacity. Few are even using all their spectrum even in cities. (Don't believe the hype of spectrum shortages. They exist but are very much the exception.) The price to buy services may be so low building just doesn't make sense.
On the other hand, no one doubts that cable could build 5G networks if the economics worked. Many were skeptical that cable had the engineers to deliver broadband back when they replaced the middleman, @Home. They did fine. Since then, folks like Tony Werner at Comcast and Balan at Liberty have built very strong tech teams. (I have a short list of people I look to for the most challenging questions but otherwise try not to bother. In cable, the list is Balan, Tony, and John Chapman of Cisco.)
Small cells in large volume look to cost only $2,000-$3,000, less than the cost of backhaul. Usually, only the incumbent telcos and cablecos have extensive fiber. As Rob notes, this is an enormous advantage.
Cablecos have high market share. Customer acquisition often costs more than actually delivering the services. Cablecos already have the customers. "This is a business of scale," Ivan Seidenberg taught me. Cablecos have the scale.
Billing and support costs are higher than bandwidth and capacity costs in large networks. There's a major saving when you can spread those costs over multiple services, triple and quad play. That's been particularly effective in Europe, where Bouygues was invigorated by a quadplay offering.
Future of 5G wireless in cable
While Verizon expects to deploy widely starting in 2018. Initially, that will primarily be a fixed wireless offering. Cablecos already have a robust DOCSIS cable connection to most homes. I haven't heard anyone in cable suggest much will happen before mmWave mobile is available ~2020.
The go/no go decision is a couple of years away. It's a make or buy choice, impossible to evaluate before the actual costs are clear.
Comcast has assembled a strong team to make sure they are ready. They are already doing the simulations and closely following the research. I expect at least Comcast to soon do some trials to gain experience.
Cable's current strategy is to continue to drive fiber deep, which is the best way to prepare for mmWave. That's also the strategy of some of the best at telcos, such as Ibrahim Gedeon at Telus. He's studying Massive MIMO, mmWave, small cells, and G.fast but is not yet sure which will be the right choice to supplement the fiber home they are doing. Meanwhile, they are raising their spending on fiber, knowing that the deep fiber build will be crucial whichever they choose.
I see cable vs telco completely differently after Balan & Rob's comment.
Rob Howald spoke at Adtran's excellent press/analyst event. I met several senior cable people there. Adtran is quietly building strong relationships in cable. This has been quite a year for junkets. Adtran, ASSIA, Calix, Huawei, and the G.fast Summit have paid my travel expenses to events.