Charter’s Rutledge emphasizes the ‘wired’ part of the wireless network

It’s long been a saying in telecommunications that “all wireless networks end in a wire.” But Charter CEO Tom Rutledge really emphasized that point at this week’s MoffettNathanson Media & Communications Summit in New York.

Both Charter and Comcast have been making good headway with their mobile virtual network operator (MVNO) businesses, seeing substantial subscribers adds in recent quarters. And the CEOs of both companies have consistently said that they see their MVNO businesses as a way to offer more choice for their broadband customers. But perhaps their mindset is starting to evolve a bit, where they’re seeing real profit possibilities in wireless.

At MoffettNathanson, Rutledge talked about the overall household connectivity. He said, there’s a lot of cashflow in the household being spent on mobile. And yet, most traffic in the household comes from the fixed broadband connection. And even the traffic in the home from mobile devices travels on the home Wi-Fi connection.

“The bulk of the business is broadband on devices that also are mobile,” said Rutledge.

He pointed out that customers only use the mobile capabilities of their devices when they’re out and about.  He said most mobile-device usage is for “sedentary activities” and “not mobile activities.”

“I think we can make the mobile device work better based on the way our network works and the way our Wi-Fi works and also have a great mobile platform,” said Rutledge.

He touted Charter’s “smart Wi-Fi,” which can manage traffic in a way that makes Wi-Fi work better on mobile devices. “As a result of that, we can move traffic onto our network in higher proportions.”

“If you just look at it as a mobile business, it’s a good business,” said Rutledge. “But I look at it as part of the entire customer relationship. It’s just an attribute of that relationship.” He said perhaps mobile and fixed broadband revenue should, in the future, be lumped together and redefined as simply connectivity of homes passed.

Comcast

David Watson, CEO of Comcast Cable, said similar things when he took his turn at the MoffettNathanson conference.

“We don't think about the customer relationship and think about just purely the piece-parts. We look at the whole relationship and price it that way. So, we're able to leverage mobile. We're the challenger in early stages. We've got a lot of runway left on how we leverage mobile. It's a growth engine in and of itself, but it's a great pricing and packaging partner to broadband.”

Of the potential runway Watson also noted that Comcast has 4 million mobile lines (2 million customers). But it has 32 million broadband relationships (64 million lines), and all those existing broadband customers are prime targets to sell mobile to. “We're just getting going,” he said. 

Comcast plans to integrate mobile into everything it does from an operational perspective to a sales channel perspective.

Altice

At the MoffettNathanson event Altice USA Dexter Goei touted the fact that Altice’s MVNO service has been running on T-Mobile’s network for about a year. Altice signed a new T-Mobile MVNO agreement a couple of months ago.

“You’ve started to see us be a lot more promotional, a lot more aggressive in terms of how we’re thinking about attracting new mobile subscribers,” said Goei.

Altice USA’s MVNO advertising actually names T-Mobile as the underlying network. This isn’t something that Comcast or Charter have done — naming Verizon as their underlying network in their advertisements.

Goei said, “We’re able to talk about the fact we’re in a great network. That you’ve got the best 5G coverage in the country. On top of that we’ve obviously been a lot more promotional on Optimum Mobile as we’re starting to rebrand as well.”

He said Altice is going to be “pushing mobile a lot more” and “2022 is already a big acceleration."

Altice is also a little bit unique compared to Comcast and Charter in that it offers its MVNO service to non-broadband customers. “We’re allowed to market 20 miles outside of where we’ve got assets,” said Goei. “And so, we are going to pick up certain subscribers that are non-fixed line subscribers today.”