Charter Communications could be the next cable operator to test the wireless waters, informing Verizon Communications of its intention to invoke its Mobile Virtual Network Operator (MVNO) rights with the carrier.
Charter chairman and CEO Tom Rutledge said a wireless product is in the company’s future, but gave few details at the Goldman Sachs Communacopia conference Wednesday.
“We have told Verizon we’re interested pursuing that MVNO agreement and we are in the process of effectuating it. We’d like to pursue that relationship, and we’ve talked to other companies about MVNOs,” Rutledge said at the conference.
The Charter revelation comes on the heels of Comcast chairman and CEO Brian Roberts’ announcement earlier in the week that it would launch a wireless product in mid-2017, utilizing its own Verizon MVNO agreement. Comcast received those MVNO rights as part of SpectrumCo’s sale of wireless spectrum to Verizon in 2011. Comcast invoked those MVNO rights last October.
Charter wasn’t part of the SpectrumCo consortium, but it recently closed on the purchase of two former members – Time Warner Cable and Bright House Networks. It was widely believed that Charter would exercise those MVNO rights.
Just what Charter will do in the wireless field remains to be seen. Rutledge didn’t give many details but he did acknowledge that the video business was becoming increasingly mobile.
“To get from where we are to true mobility is going to require the use of our Wi-Fi [network], it will require the relationships we have with MVNOs, and it’s going to require us to actually build out [our] network at some point in the future,” Rutledge said.
Rutledge said the MVNO alone is primarily a traditional smartphone technology platform, not deeply integrated and has its limitations.
“From a value proposition, if you package and price it properly and you can get an appropriate wholesale discount so you can do that with a little bit of margin, you can drive your penetration much deeper,” Rutledge said.
Charter, he said, has about 50 million homes passed and about 25 million subscriber relationships. But the 25 million non-customers within the footprint “is our upside. To the extent mobility can help us drive that, the economics of filling in your penetration from an ROI perspective are fantastic,” Rutledge added.
