Cable MSOs beware: Wireless broadband is a growing threat
The declining price of wireless data is making wireless broadband an increasingly compelling alternative to wired broadband, according to Walt Piecyk, analyst with BTIG. In a research note, Piecyk notes that a three-person household that currently pays $60 for wired broadband and $125 to share 5 GB per month of data from operators like Verizon and AT&T, could cut their wired broadband service and use that $60 to buy an additional 15 GB per month on their shared wireless data plan. According to research from Sandvine, the typical household uses about 22 GB per month of broadband.
Although wired broadband has not yet felt the pressure from wireless broadband offers – Piecyk notes that in the fourth quarter of 2015, cable broadband subscribers are still growing and have seen little pressure from wireless offerings—he said that could change. And he expects cable MSOs will fight back by either acquiring a wireless operator like T-Mobile US (although Piecyk believes this will not happen soon) or by increasing their investment in Wi-Fi. In 2015, Piecyk said Comcast invested $1.7 billion in its network but spent less than $25 million on increasing its Wi-Fi hotspots. He expects that could increase in the future as a way to offset the wireless broadband threat. Commentary (sub. req.)