The CEOs from Charter and Comcast had similar responses when asked during recent investor conference appearances about the potential threat to cable broadband from the explosion of fiber and 5G fixed wireless offerings in the Internet space.
Impact: Not only did Comcast CEO Brian Roberts downplay any potential broadband threat his company might be facing from fixed wireless services, he went on record calling FWA an “inferior product,” and compared it to legacy DSL networks with speeds that can’t match what Comcast’s wireline network can offer. The comments from Roberts come despite reports that fixed wireless made up as much as 38% of net broadband additions in the fourth quarter, according to analysis from MoffettNathanson.
Neither T-Mobile nor Verizon, the recipients of more than 300,000 net FWA gains in the quarter, have not been shy about targeting cable in their advertising (see their multi-million-dollar Super Bowl ads as Exhibit A) and executives from both wireless carriers have explicitly said they view their fixed wireless offerings as a direct competitor to cable broadband, with a cheaper price point, no contract required, and no data caps. In fact, T-Mobile claims half of its FWA subscribers are leaving their cable Internet providers to take its cheaper wireless option. But Roberts remains unfazed, saying the lower speeds offered by FWA don’t beat Comcast’s broadband options, especially as more customers are taking higher speeds each year.
The growing number of fiber deployments around the country, on the other hand, have Roberts’ attention. He said that while he expects Comcast to stay ahead of fiber given its experience competing against the technology for more than 15 years, the large scale of today’s deployments is something Comcast takes seriously, especially as more of its footprint overlaps with fiber. Roberts maintained that Comcast is still well-positioned to fend off the fiber threat, although he projects 55% of the company’s overall footprint will be passed by fiber in the next five years, up from what he estimates is a 40% overlap today.
Charter CEO Tom Rutledge also downplayed the potential threat from FWA when discussing the challenges facing cable broadband providers, using the same DSL comparison used by Roberts. He did acknowledge that FWA could have some impact in the market but maintained that cable is ultimately the better option. Instead, he touted Charter’s network superiority and implied that FWA would not be able to compete with cable’s product, especially with Charter’s combination of fiber in its new build areas and high-split upgrades to its existing DOCSIS 3.1 network, which will be followed by DOCSIS 4.0 upgrades. The high-split upgrades should make it possible for Charter to offer symmetrical multi-gigabit speeds, something cable operators have not been able to match fiber providers on yet.
