People have been talking about convergence in the telecommunications space for decades, whether it’s convergence of products or convergence of technologies.
Speaking at the Goldman Sachs Communacopia + Technology Conference today, AT&T’s CEO John Stankey said, “There’s a fallacy to say there’s fixed networks and wireless networks. There are only fiber networks with different access technologies on the end of them. That’s where this is all going.”
He said the most important thing is having “robust fiber infrastructure with the right capillaries in the right places.” Those “capillaries” can end with different types of access technologies, whether that’s a broadband router or a cell site or a managed router at a business location. “That’s where I believe the domestic U.S. market is moving,” said Stankey.
In fact, during Stankey’s three-year tenure as CEO of AT&T, he’s led a clear two-pronged strategy for the company: fiber and 5G.
Cable competition
He continued talking about fixed and wireless convergence when he was asked about wireless competition from the cable companies. Comcast, Charter and Cox all provide mobile virtual network operator (MVNO) services, using Verizon’s network.
“If you want to manage what a customer ultimately needs for access to the internet I think you’re going to need to control your assets and services that you deliver over time,” said Stankey. “The first version of convergence typically ends up being some kind of bundle, but ultimately it morphs into product evolution. The product is the network.”
He said fixed and wireless networks that are managed at a cohesive level allow the service provider to offer things such as holistic security and privacy, things that cable companies won’t be able to provide because they don’t own and operate their own wireless networks.
He also questioned the sustainability of the cable companies’ offers to their MVNO customers, where they’ve been giving away free lines as an introductory promotion. “It’s tough to be a price leader forever, and I look at what kind of customers they’re picking up and how they’re picking them up. I think you’re getting into a situation where just giving away a line for free isn’t necessarily going to be sustainable.”
Finally, he suggested that customers are bound to come up with new mobile applications, which “I don’t think are going to be subject to offloading.”