Tag Archives: convergence

Fiber Matters in the Market

Roger Entner, of Recon Analytics, published an article in Light Reading that challenges the paradigm of the benefits of convergence. Convergence has most recently come to mean bundling broadband and cellular service. There is a widespread industry belief that ISPs need to have a cellular product to thrive, and cable companies have added a cellular product in the name of convergence. Entner says there is only one kind of convergence that makes a real market difference – fiber ISPs with a cellular product do far better than any other kind of convergence.

He bases his conclusions on different sets of facts. First is the results of 1.2 million surveys given by Recon Analytics between April 2023 and March 2026, asking about ISPs that offer a cellular product. Those surveys showed that, by far, the best indicator of a high cellular market share is the ownership of fiber. Other factors like brand, network quality, price, or specific details of the bundle had a far smaller impact on cellular market share.

Entner also looked at some specific examples. In markets where AT&T has no wireline network, the company has a 13.9% cellular market share. Where AT&T is the incumbent telco but doesn’t own fiber, the cellular market share is 6.2% higher at 20.1%. But where AT&T owns significant fiber, its cellular market penetration rate is 28.9%. These statistics show a bump in cellular market share for being an incumbent, but a bigger bump of an 8.8% market share for having fiber. The statistics for Verizon are similar.

Entner’s findings mean a massive financial boost for a company with both fiber and a cellular product. The statistics show a big extra financial boost for building fiber that I’ve never seen a fiber ISP talk about. This extra boost from a higher cellular market share means there is a greater benefit of building fiber than just fiber revenues, and greatly increases the value of investing in fiber.

What does this mean for cable companies? Comcast first started selling cell service in 2017, and Charter in 2018. If just owning the network was the driver of a high cellular market share, these two companies would be winning the cellular marketing battle since they have far more passings and customers than telcos. Enter concludes that the perceived quality of the ISP is what matters. He compared the Customer Net Promoter Score (cNPS) for the two industry segments. Big fiber ISPs have a cNPS around 27, while big cable is at 2.6. For those not familiar with cNPS, the number is derived by subtracting the percentage of customers that don’t like an ISP (detractors) from those that do (promoters). The difference in customer perception between fiber and cable companies, as shown by the cNPS ratings, is gigantic.

What does all of this mean in the market? First, this one simple rating explains why AT&T is building so much fiber, why Verizon bought Frontier, and why T-Mobile is buying ISPs left and right. These companies all clearly understand the extra market benefit of owning fiber.

This also explains why smaller fiber overbuilders are trying to find a way to add an affordable cellular product, since they assume a big earnings boost from the convergence. That desire comes with a word of caution for rural fiber owners. It could actually be a negative to be the cellular company in a rural market where the cellular coverage is crappy, as is true in much of rural America.

Interestingly, Entner ignored FWA cellular, at least in this article. (The full report is available for a fee.) FWA cellular providers currently have an overall cNPS rating of 40, which is significantly better than the big fiber ISPs at 27. The high cNPS for FWA means that customers are much happier with FWA broadband than with fiber or cable. This might explain why FWA cellular has been outselling all other types of broadband for the last several years.

It’s worth noting that customer sentiment and cNPS scores change over time, so what is true today will probably not be true five years from now. Cable companies got a huge black eye during the pandemic when they struggled to support people working and schooling at home. I think this is when fiber got a better reputation than cable companies. But cable companies have been making big investments to improve both download and upload speeds, and over time, the public will likely eventually feel better about them. Cable companies have also quietly been building fiber, but for now, the big ones seem to mostly be content to improve speeds on existing networks.

This is an interesting way to look at convergence, and it explains a lot about the market experience of fiber ISPs, which are growing, and cable companies, which are losing broadband customers.

Some Thoughts on Convergence

An article in Light Reading reported that the largest cable companies captured about one-third of the net cellular customer additions in the fourth quarter of 2025. This statistic combines the cellular sales of Charter, Comcast, and Optimum. The overall cable industry statistics would be even higher if it included sales from Cox and Mediacom, which are privately held.

Industry analysts are using the word convergence as shorthand for competition that bundles cell service with broadband. Convergence is the newest strategy that replaces the traditional bundling strategy of selling a package of broadband, cable TV, and voice.

Industry press over the last year is full of articles that wonder about the ultimate success of the strategy. Cable companies seem to have the upper hand in a convergence bundle since they collectively pass roughly 122 million homes. I’ve read a few analysts who argue that the big telcos like AT&T and Verizon are at a disadvantage since they pass a lot fewer homes with fiber.

But I think these analysts are missing something. There are three players in the convergence battle, and each is using a different tactic:

  • Cable companies are finding success with the convergence bundle by combining full-price broadband with inexpensive cellular service. The main goal of the cable companies is to reduce broadband churn, and a customer loses their cable company cell service if they drop broadband.
  • The fiber parts of the telcos don’t seem to be pushing the convergence package to the same extent. They are mostly still betting that people like fiber a lot more than cable broadband. However, AT&T just announced a fiber/cellular bundle with gigabit and one cellphone for $90 and two cellphones $120.
  • The third competitors are the FWA cellular companies. They are bundling full-price cell service with inexpensive broadband. At least for now, they seem to be winning the convergence battle. In the fourth quarter of last year, AT&T, T-Mobile, and Verizon added over 1 million net FWA customers while the rest of the industry barely grew.

I know it seems odd to be counting the FWA competitors as different than the fiber telcos, since they are largely the same companies. But anybody who follows these companies understands there is not a lot of bleed-over between the wireline and the cellular parts of the businesses. The FWA division of the telcos are willing to compete for a fiber customer from their own sister companies.

It’s becoming clear that affordability is a major issue for a huge number of households. As long as that stays in the forefront, it seems like many households will lean towards the convergence plan that gives them a significant discount. I doubt that customers care if the discount comes from a lower price for broadband or cellular.

I think the cable companies are on to something with their focus on reducing churn. I talked to a few people in the last year who wanted to leave Charter and move to fiber broadband but didn’t want to lose their cheap cell service – and didn’t want to go through the hassle of replacing both services at the same time. The cable companies were really good at the triple play bundle in the 2010s, and a huge number of households felt they were held captive by the bundle. Are we headed back to that same place, but this time with multiple bundle options that force customers to buy both services from the same company?

Perhaps led by the recent new plan from AT&T, perhaps the fiber telcos are ready to jump into the convergence battle. I have wondered for years why they didn’t lead the market in this effort, and I guess it was due to internal battles over which division swallowed the bundling discount.