• Despite growing fiber and FWA momentum in their home market, US cable MSOs are still mostly sticking with cable as their current and future network technology.
• This insistence on staying the course is natural, given cable’s “value for money” ratio, but the technological superiority of fiber and flexibility of FWA may increasingly endanger the very core of the MSO’s business.
Recent announcements coming from major US telcos indicate new enthusiasm for fiber and FWA investment. AT&T is forging on with its plan to add 30 million new locations to its fiber network, and has introduced XGS-PON into its network, enabling 2Gbps and 5Gbps services. Verizon has (finally) started offering 2Gbps service on its NG-PON2 network in New York City. Smaller operators like Frontier, Ziply, Vexus Fiber, and Hotwire have mostly jumped on the XGS-PON bandwagon and offer multi-gig services as well.
AT&T, T-Mobile, and Verizon are also at the forefront of FWA deployments. FWA, though usually seen as less reliable and offering lower performance than HFC, can in some cases outperform cable, while at the same time its deployment economics and speed can allow mobile operators to be very aggressive with pricing and service availability.
All these developments have so far had limited impact on cable MSOs’ strategic network transformation plans:
With the exception of Altice and Cox (to a degree), it seems that cable MSOs largely intend to double down on their commitment to HFC as their technology of choice for the immediate and foreseeable future. However, the comparison of HFC to competing technologies – FTTP and FWA – should make MSOs think long and hard about their competitive positioning. FTTP has – with XGS-PON widely available – reached a point where it clearly outperforms DOCSIS 3.1 and will likely be superior to the emerging DOCSIS 4.0 as well. FWA can in many cases compete with DOCSIS 3.1 on performance and has a strong disruptive potential with unbeatable economics in less dense suburban and rural areas.
This significant increase of competition in the US will inevitably increase pressure on cable MSOs, not only in their core residential market segment, but also in adjacent SME and wholesale connectivity markets. The cocktail of high-performance fiber connectivity, and flexible FWA offerings can increase customer churn in highly competitive and lucrative urban and suburban markets while FWA curtails cable MSOs’ edge-out potential in rural areas. Looking at their overall footprint, US cable MSOs’ network strategy has not changed significantly in reaction to the new wave of fiber and FWA investment. This can put the cable industry in a dangerous position, and threaten its dominance of the US broadband market.