FCC’s big broadcast spectrum auction is coming up next month, and so far, it looks like there will only be one bidder- Comcast.
Three of the five biggest U.S. MSOs: TWC, Charter, and Bright House Networks are all wrapped up in the pending merger that is said to finalize in the second quarter of 2016.
Tom Rutledge, CEO of Charter, mentioned that Charter will almost certainly not be a bidder in the upcoming auction despite its strong interest in expanding its mobile presence.While very tempted to follow the lead of Comcast and buy more spectrum, he said the timing probably won’t work because the MSO won’t yet know what its eventual service footprint will look like.
TWC also responded stating they will not be participating due to the pending takeover by Charter, and they will instead be focusing on their WiFi buildout. Marcus stated At this point, that’s the extent of our wireless game plan.
Bright House Networks commented similar to TWC in that they’re preoccupied with the pending merger, and as for Cablevision, one of the five largest MSO’s, they’re seeking to gain state and federal regulatory approval of its proposed takeover by French media giant, Altice.
That just leaves Cox Communications Inc., the nation’s third-largest MSO, as a possible bidder against Comcast.
Comcast and the bid
The winner of the bid is expected to pay as much as $60 billion to $80 billion to the US Treasury as wireless players seek more blocks for 4G and potential 5G service rollouts. Comcast officials made it clear that they were interested in playing during their latest earnings call and plan to file to participate.
Comcast CFO, Michael Cavanagh commented, We are going to evaluate, consider and may purchase, but only if we consider the price is right. Comcast has already accumulated more than 13.3 million WiFi hotspots throughout the U.S. and mentioned plans to resell mobile service through Verizon Wireless.
What could this mean for the mobile market with Comcast as a potential new player?
Comcast as a wireless player
One big question is whether Comcast aims to be a national player in wireless or provide mobile video services within its current service area. Comcast has been building out a public Wi-Fi network using unlicensed spectrum within its local markets.
If Comcast decided to go the National route, they may have a few options when it comes to powering up in the mobile space. It could partner with another cable firm, like Charter, acquire mobile carriers like T- Mobile or Sprint, or partner with a mobile carrier like Verizon. Wireless is a national market, so if Comcast wants to get a chunk of that pie and be an active player they will need to consider a national solution.
I believe Comcast is looking to compete with AT&T’s strategy when they acquired broadcaster- DirecTV in order to offer a bundle deal with wireless and pay-TV services. The question is will this go over well with Comcast providers if they decided to bundle?
It is a convenience factor for some consumers instead of having multiple providers for separate services to combine everything for one whole price. The catch is the price may not always be smaller, but customer service is also a key factor on keeping providers or potentially switching if you don’t like the new plans coming to the table.
Comcast also mentioned that this year they expect cable programming costs to rise 10% in 2016 as they negotiate contracts for on-demand and out-of-home viewing rights to content which means that adding wireless could increase those prices even more.
Time will tell on March 29, 2016 which way cable providers will go and who could ultimately be a game changer in the mobile space.