2022 Was a Year of Change for the Big ISPs

There was a sea change among the big ISPs in 2022. The big news is that most of the growth in the industry came from the T-Mobile and Verizon cellular FWA broadband product. Cable company growth crawled to a halt after a robust 2021, and the sector only grew by 55,000 net broadband customers in the fourth quarter. The big telcos still had small losses for the year, but the big news is that they added 2.4 million customers to fiber during the year.

The following list of ISPs represents about 95% of the U.S. broadband market. The large ISPs, in aggregate, added just over 3.5 million net customers in 2022. The two cellular FWA companies added 3,171,000 of those additions. Cable companies added 517,103 customers for the year, with most of the growth coming at the beginning of the year. The big telcos had a net loss of 181,276 customers but continued to furiously replace DSL with fiber.

The following statistics were compiled by the Leichtman Research Group, which tracks the broadband performance of the largest ISPs in the country. Following are the customers counts for the fourth quarter and the end of year 2022:

% 4Q Annual
4Q 2022 4Q Change Change Change
Comcast 32,151,000 (26,000) -0.1% 250,000
Charter 30,433,000 105,000 0.3% 344,000
AT&T 15,386,000 (66,000) -0.4% (118,000)
Verizon 7,484,000 37,000 0.5% 119,000
Cox 5,560,000 0 0.0% 30,000
Altice 4,282,900 (7,700) -0.2% (103,300)
Lumen 3,037,000 (63,250) -2.0% (253,000)
Frontier 2,839,000 8,000 0.3% 40,000
T-Mobile FWA 2,646,000 524,000 24.7% 2,000,000
Mediacom 1,468,000 0 0.0% 5,000
Verizon FWA 1,452,000 389,000 36.6% 1,171,000
Windstream 1,175,000 0 0.0% 10,300
Cable ONE 1,060,400 (1,600) -0.2% 14,400
Breezeline 693,781 (14,173) -2.0% (22,997)
TDS 510,000 3,500 0.7% 19,700
Consolidated 367,458 (14,454) -3.8% 724
Total 110,545,539 873,323 0.8% 3,506,827
Cable 75,649,081 55,527 0.1% 517,103
Telco 30,798,458 (95,204) -0.3% (181,276)
FWA 4,098,000 913,000 28.7% 3,171,000

There are a lot of interesting trends withing these numbers:

  • T-Mobile is now the 9th largest ISP, and the Verizon FWA product comes in at eleventh. T-Mobile is poised to pass Frontier and Lumen soon at the current growth rate.
  • While all of the landline ISPs on the list are feeling pressure from the cellular FWA product, the bigger and more permanent challenge for the cable companies is the 2.4 million telco customers added to fiber to the year. That statistic shows why cable companies are scrambling to improve upload speeds.
  • The biggest loser on the list continues to be Lumen, which lost 7.7% of its broadband customers for the year. It’s worth noting that the above numbers represent the smaller Lumen after the spinoff of Brightspeed in 2022. Breezeline (Formerly Atlantic Broadband) was the biggest percentage loser among cable companies, having lost 3.3% of broadband customers during the year.
  • TDS continues to be the fastest-growing landline ISP at 4.0% growth for the year. Next is Verizon FiOS, having grown by 1.6% for the year.
The Industry

Will Cellular Companies Pursue BEAD Grants?

Several people have asked me recently if cellular companies will be pursuing BEAD grants. It’s an interesting question that I don’t think anybody other than the cellular carriers know the answer. But it’s an intriguing question since it’s a possibility.

Until recently, cellular companies didn’t have a product that would have qualified for broadband grants. BEAD and other grants are awarded to ISPs that serve homes an businesses, not cell phones. But the introduction of the FWA product line has created a broadband product that might qualify for grants.

Cellular companies pass the first sniff for BEAD grants since the wireless technology uses licensed spectrum. The NTIA says it does not consider wireless broadband using public spectrum to be reliable.

The next hurdle to winning grant funding would be for cellular companies to convince state grant offices that they can deliver broadband speeds greater than 100/20 Mbps. That’s an interesting challenge for a cellular carrier. From what I’ve seen, customers living close to a cell site can easily exceed those speeds. I’ve talked to a few people getting over 200 Mbps download on FWA – but each happened to live close to a cell site.

But speeds on FWA decrease rapidly with distance. I’ve talked to customers who are less than two miles from a cell site and aren’t seeing download speeds of 100 Mbps. But that doesn’t disqualify a cellular carrier from pursuing grants. BEAD allows for grants that cover small areas, theoretically as small as a single home.

More interestingly, there is no reason that a cellular company couldn’t propose a grant to build new towers to expand the faster coverage and also the fiber lines to feed the towers. It’s not hard to picture a network in rural areas where this might be the lowest cost solution. One has to wonder if a cellular company would ever want such a network – that’s a lot of cell sites to maintain that likely each only serve a small number of customers.

Another issue to consider is that cellular carriers are currently providing priority to cell phones over FWA customers. If the network gets busy, cell phones customers get the requested broadband, and FWA customers get throttled. Broadband offices might deem this to be disqualifying in areas with any significant population – but this seems like far less of a concern in a rural setting where cell sites probably rarely get overstressed.

Yet another issue is the ability of a grant winner to serve everybody in the footprint. Unless a grant area has extremely low density, it’s likely that the cell site doesn’t have the capacity to give everybody unlimited home broadband.

Another interesting issue to consider is how mapping plays into this. I’ve heard a lot of comments from folks who are claiming that T-Mobile and Verizon are already claiming fast speeds in a lot of places. Folks are saying the coverage areas claimed in the FCC maps seem a lot larger than the reality. It’s not hard to understand the motivations for cellular companies to claim fast speeds since it helps with marketing. This is particularly important for T-Mobile, which reached an agreement with the government as a condition of the Sprint merger to cover a large percentage of the country with faster speeds.

But claiming high speeds and claiming coverage areas that are larger than reality are counterproductive to seeking grants. An ISP can’t ask for grant funding for a place it says already has fast broadband.

The more important question for the industry is how the FWA claims of current speeds and coverage might hurt other grants. Will broadband offices not award grants in places the cellular companies claim to already have fast broadband? The emergence of the FWA technology is so new that I suspect most state broadband offices haven’t come to grips with that question. Many states have been creating their own broadband maps in recent years, and FWA technology has not been factored into those maps. This is just one more complication for broadband offices – as if they needed another issue.

The Industry

Final 2022 Statistics from Ookla

As a numbers guy, I’m always intrigued by the Ookla Speedtest Global Index since it provides an interesting look at broadband speeds in the U.S. and around the world. This report shows the median and mean upload speeds, download speeds, and latency for both mobile and fixed broadband by country.

The median download speeds for fixed broadband in the U.S. at the end of 2022 was 193.7 Mbps download, 22.6 Mbps upload, and 14 milliseconds of latency. As a reminder of statistics, the median means that half of all speed tests showed faster results and half slower results than those numbers. Ookla thinks that median speeds are the best way to track the overall market and the difference between carriers.

The fastest median download speeds for landline ISPs at the end of 2022 comes from Comcast at 226.1 Mbps. Charter was at 225.3 Mbps, Cox at 212.3 Mbps, Altice at 190.8 Mbps, AT&T Internet at 187.1 Mbps, and Verizon at 183.2 Mbps. Median upload speeds were obviously faster for ISPs using fiber, with the fourth quarter median upload speeds showing AT&T Internet at 142.8 Mbps, Verizon at 104.9 Mbps, Altice at 29.8 Mbps, Comcast at 20.4 Mbps, Charter at 11.8 Mbps, and Cox at 10.7 Mbps. Missing from these numbers are smaller fiber-only ISPs that have much faster median speeds than all of these large companies.

Those are interesting upload speeds for some of the cable companies during a year of upcoming giant BEAD grants since a large percentage of customers of the cable companies are clearly not achieving the 20 Mbps upload speeds that is being used by the grants to define an underserved customer. We’ve already seen some state broadband grants awarded in cable company service areas – will folks apply for BEAD grants to compete with underperforming cable companies?

The median download speeds for cellular broadband in the U.S. at the end of 2022 was 78.9 Mbps download, 9.3 Mbps upload, and 31 milliseconds of latency. For the fourth quarter of 2022, Ookla says that T-Mobile has the fastest download speeds – on the modern chipsets – of 151.4 Mbps, up significantly higher than the third quarter 2022 median speed of 116.1 Mbps. Ookla not only measures mobile speed tests, but records the type of device being used. Old flip phones still using 3G will have lower speeds based on the capacity of the device. At least for now, the median download speeds for T-Mobile are far faster than Verizon (69.0 Mbps) and AT&T (65.6 Mbps). This likely means to some extent that the Verizon and AT&T are still supporting a greater number of older and slower devices. Median upload speeds were closer with T-Mobile at 12.5 Mbps, Verizon at 9.3 Mbps, and AT&T at 8.0 Mbps.

Ookla shows mobile latencies are about the same between the carriers, with T-Mobile at 56 ms, Verizon at 58 ms, and AT&T at 60 ms. Ookla calculates what it calls a multi-server latency, which represents the latency that should be expected by the average user at times when the local network is not under heavy load.

I looked back at an old blog I wrote in 2017, and the differences in mobile broadband speeds between then and now are astonishing. For example, in a 2017 report, Ookla showed median cellular download speeds nationwide at 22.7 Mbps, which was up 19% over 2016. I took a speed test on AT&T when I wrote the 2017 blog and got a download speed test of 13 Mbps. I took a test this morning on my AT&T cell phone and got a download speed of 141 Mbps. That’s more than a tenfold increase in speed in just five years.

Back in that same time frame, I was writing about how the cellular data networks were getting badly clogged and overloaded. It didn’t strike me until I wrote this blog that one of the ways that cellular companies have stretched their network capacity is by increasing speeds. A tenfold increase in speed means that the time required to handle the data requirement for a given customer is reduced by that same magnitude. Upgrading to a faster network means increasing the capacity to serve a lot more customers without a major network upgrade.

The Industry


I recently noticed in the T-Mobile pricing for FWA cellular broadband that the company is claiming that the price is locked-in and will never be raised. In the pricing world, that kind of offer is referred to as a price-for-life, although T-Mobile didn’t use that term.

I’ve had clients ask me about this over the years, and I hopefully talked most of them out of the idea. This is the kind of idea that comes from marketing folks because it’s a gimmick that makes it easier to sell. But there are some long-term consequences of offering a guaranteed price forever.

There are some ugly stories of when price-for-life went sour. Back in 2016, Comcast door-to-door salespeople offered residents some price-for-life packages in Salt Lake City that were rolled out in anticipation of Google Fiber coming to the market. For example, residents were offered a triple play bundle at $120 per month that included broadband, cable TV, and a telephone line. The Comcast doorknockers promised customers a lifetime price, backed up in writing that their price would be good for as long as the customer kept the plan. Customers were assured at each step of the sales process that they were buying a lifeline plan and that rates would never be increased. For example, Comcast customer service reps on the phone repeated the assurance that the prices would be good forever.

It got ugly when the Comcast corporate folks raised rates in 2018. There was a class action lawsuit that alleged that as many as 20% of the 200,000 upgrades sold during the sales campaign were sold as lifetime plans. To nobody’s surprise, Comcast customer service denied any knowledge of selling a lifetime plan it had marketed just two years earlier. Comcast enforced the rate increase, which was substantial for some customers.

Most ISPs who market a lifetime rate would not be dumb enough to raise the rates only two years later. But there is a risk for T-Mobile to repeat the Comcast gaffe. It’s not hard to imagine five years from now that somebody at T-Mobile headquarters will be searching around for extra margin and notice this pile of underpriced customers.

It’s even more likely that T-Mobile can offer this product for life since it already knows the product won’t be around five years from now. As the company introduces future 5G features, at some point it could declare the current product to be technically obsolete and discontinue it.

That tactic would be impossible for a fiber provider, but the average customer doesn’t understand cellular networks well enough to dispute that kind of maneuver. But for my clients who have a fiber network, I can picture some households keeping a product-for-life for twenty or thirty years. I think a lot of people would sign up for a price-for-life for gigabit service.

But there are other reasons why price-for-life is a bad idea. The number one issue is inflation. We just went through a period where we saw steep inflation that would quickly eat away at the margin on a lifetime product. This is particularly true when offering a price-for-life for a product that has already been priced at introductory rates. Even if we return to a long-term inflation rate of 3% annually, the margins on a price-for-life product will drop steadily each year.

The main problem I have with the price-for-life concept is that it provides an easy path for the marketing department to make sales and earn sales bonuses today while pushing lower margins into somebody else’s lap in future years. Sales departments never heard of a sales gimmick they don’t like, and this is clearly a gimmick. A more sensible approach would be to offer a fixed price for some reasonable term, like three to five years. That’s enough to be a sales hook without killing the bottom line in future years.

My main objection to price-for-life is that it conveys a message to consumers that runs against the philosophy of most small ISPs. Most small ISPs pride themselves on offering fair rates all of the time, which makes it easy to favorably contrast themselves with the big ISPs that constantly run special pricing promotions. Once a small ISP runs a price-for-life promotion it loses that message and marketing advantage because it has created a pile of customers that year-over-year have lower rates than their neighbors – and those neighbors will notice.

As odd as it sounds, a price-for-life also creates an administrative burden on an ISP. Having a pile of customers that are different than everybody else is something that will have to be explained to every new customer service rep for decades to come. Getting everybody at an ISP to remember the nuances of the products and prices sold in the past is one more complication that makes it harder on future staff. This was one of the major issues when Charter purchased Time Warner Cable. Time Warner had hundreds of different old grandfathered price plans that confused Charter employees. Charter resolved this by killing off the old rate plans – effectively voiding old price-for-life promises.

There is one counterargument to be made in favor of price-for-life. There is value in a customer that never churns. Even if a customer delivers less margin every year by hanging on to a price-for-life product, that customer is delivering a huge accumulated return by paying for a product for a decade or two. But this argument just sounds like a justification, because an ISP likely would have made more profits over time by not locking in rates, even after considering future churn. In my opinion, the long-term downsides and complications of price-for-life outweigh this economic argument.

The Industry

How Good is FWA Wireless?

T-Mobile got some bad news recently when the the National Advertising Division (NAD) of BBB National Programs informed T-Mobile that it could not use the words “fast” and “reliable” when advertising for its FWA fixed wireless product that it brands as T-Mobile Home Internet. This ruling came as a result of a complaint from Comcast that T-Mobile is overstating the capabilities of the FWA product in advertising.

Most large carriers belong to the BBB National Programs as a lower cost way of mitigating advertising disputes than lawsuits. ISPS agree to go along with the rulings issued by the group as a condition of joining. However, in this case, T-Mobile is appealing the decision. The news wasn’t all bad for T-Mobile since it was ruled that T-Mobile could continue to advertise that the price of FWA is ‘locked-in” since the company hasn’t raised its rates.

Anybody who has looked closely at the performance of FWA wireless from T-Mobile or Verizon would agree with this ruling. The main reason for the ruling is that the performance of FWA can vary widely. It’s a broadband product that connects to customers from a cell site, and the distance between a customer and the cell site makes a big difference in the speed being delivered. I talked to one customer located near to a T-Mobile tower who was consistently getting over 200 Mbps download and was really pleased with the product. But in this same community, customers only a mile or so away from that same cell tower were getting speeds closer to 50-100 Mbps and were not as happy with the product. A mile further away and speeds were not good at all, and I talked to a farmer who sent the receiver back. In a rural area, a mile isn’t very far, and unless there are a lot of towers, most folks are not getting the advertised fast speeds.

The one consistent feedback I’ve gotten in talking to FWA customers is that speeds vary. This is true for all cellular broadband, and cell phone customers are used to seeing a different number of bars of broadband speed over time from the same location such as home or the office. Cellular data speeds vary for a wide variety of reasons like temperature and weather.

But the biggest reason for the variability is the overall volume of data being demanded from a given cell site at a given moment. Like most broadband products, cellular broadband is a shared data product where the broadband is divvied up among the users at any given time. But unlike landline broadband networks, a cellular company cannot control the number of users at a cell site. Since cell phones are mobile, there is no telling how many people might be demanding a cellular data connection at any given time.

FWA has one more limitation in that the cellular carriers have elected to give first priority to cell phones over FWA customers. This means that when a cell site gets busy, the carrier will choke the delivered data speeds to FWA customers in order to deliver the most speed possible to cellular customers. This makes sense since each big T-Mobile and Verizon have roughly 100 million cellular customers compared to a few million FWA customers. They do not want to make cellular customers unhappy with broadband speeds, and so they throttle FWA when a cell site gets busy.

T-Mobile doesn’t hide this, and the throttling is discussed in the fine print when the product is advertised. But that throttling is part of the reason that T-Mobile can’t describe it’s product as reliable – because at busy times it isn’t.

The big selling point for FWA is the low price and I’m sure the price is what attracted urban customers. The speeds are going to be liked in rural areas where there are no alternatives, but there is definitely a severe distance limitation – in a rural area a 50 Mbps connection might be a big leap up in performance. But the FWA product is a lot slower than cable company broadband. Households who are heavy broadband users might not like the slower speeds and the variability. This ruling is telling T-Mobile that it can’t advertise in a way that makes FWA sound like an equivalent alternative to cable or fiber broadband, because it isn’t. It’s going to be interesting to see how T-Mobile adjusts it’s advertising after this ruling.

Technology The Industry

Getting Serious About Satellite Texting

One of the more interesting telecom announcements at the CES electronics show in Vegas was the announcement from the partnership of Qualcomm and Iridium of plans to bring satellite texting capability to many more cell phones and other devices.

We’ve already seen a few other announcements recently of the ability to make emergency text calls when out of reach of cell coverage. The team of T-Mobile and SpaceX say that T-Mobile customers will be able to reach 911 through a satellite some time in 2023. Apple launched an Emergency SOS system for its newest iPhone users in a partnership with Globalstar, but the service is only available in a handful of cities.

Qualcomm is building this feature into its premier Snapdragon 8 Gen 2 chips, so any new phone or other device using that chip will have texting capabilities. The company says it plans to eventually build the capability into other more affordable chips as well.

For now, Qualcomm has established a 911 service similar to the T-Mobile plans where people can reach 911 when out of the range of the normal cellular network. But the company envisions that cellular carriers will develop price plans to let users text for a fee. That would provide folks with the ability to stay connected while hiking in remote wilderness or during a sea cruise.

Qualcomm is in the business of selling chips, and it would love to see this capability expanded to other places, like built into laptops or new cars. Putting the technology in cars is a major selling point since it would enable features like automatically contacting 911 after an accident.

This first-generation product will be far from perfect, but that’s to be expected from what is basically a beta test. For example, while Iridium satellites blanket the earth, there are times when there is no satellite overhead, and a user might have to wait ten minutes for the next satellite. It seems this issue can be resolved by cell carriers partnering with multiple satellite providers.

This new technology opens up the possibility for people to have some limited connectivity almost anywhere on the globe. For the younger connected generations, this has great appeal. Most people I know with GenZ kids tell me that it’s like banishment to take kids out of reach of connectivity. But more practically, much of the world does not have reliable cellular coverage, and this can bring some form of communication to all.

I know people will read this and assume that the next step is to use satellites to provide data connectivity to cell phones or laptops from anywhere. However, there are limits of physics that make that unrealistic for a handset. The latest Starlink dishy receiver is 19 by 12 inches, and that much surface area is needed to receive the signal from a satellite. However, it’s not hard to imagine a hiker rolling out a flexible receiver to communicate with a satellite – assuming they bring along some kind of power source, perhaps solar.

I track telecom announcements of new technologies and products to give me a baseline a decade from now to see how various technologies performed. It will be interesting to see if satellite texting becomes a routine part of every cellular plan or if it withers on the vine like many other seemingly good ideas that the market didn’t embrace.

Improving Your Business

Competing Against Big Cable Companies

I’m asked at least twenty times a year how a small ISP can compete against the big cable companies. The question comes from several sources – a newly-formed ISP that is nervous about competing against a giant company, a rural ISP that is entering a larger market to compete, or investors thinking of funding a new ISP. These folks are rightfully nervous about competing against the big cable companies. Comcast and Charter together have roughly 55% of all broadband customers in the country, so the assumption is that they are formidable competitors.

It’s more realistic to say that they are decent competitors. They have slick marketing materials to try to lure customers. They have persuasive online marketing campaigns to snag the attention of new customers. They have good win-back programs to try to keep customers from leaving them.

But the two big cable companies have one obvious weakness – their prices are significantly higher than everybody else in their markets. Every marketing push by these companies involves giving temporary low special prices to lure customers – but those prices eventually revert to much higher list prices.

There is a great example of this in the market today. Both Verizon and T-Mobile have been adding large numbers of broadband customers to their fixed wireless FWA products that deliver home broadband using cellular spectrum. The two cellular companies have been highly successful in the marketplace, adding over 2.6 million new broadband customers through the first three quarters of 2022, while Comcast and Charter added about half a million customers during that same time period – mostly at the start of the year.

The FWA wireless product is clearly competing on price. The FWA broadband is not as fast or robust as cable company broadband, but the prices are attractive to a lot of consumers. For example, T-Mobile offers 100 Mbps broadband for a $50 monthly fee for customers willing to use autopay – a price T-Mobile says will never increase. This is far below the prices of the cable companies, which are in the range of $90 per month for standalone broadband.

I thought I’d take a look at how Comcast is competing against the lower-price FWA products. Comcast has two special offers in January 2023 for standalone broadband.

  • In a special offer that ends February 1, Comcast will provide 400 Mbps broadband for $30 per month, which requires autopay. The special price is under a contract for one year, but the special price extends for two years (meaning that if a customer terminates during the first year they have to pay for the remaining months of the contract). The special price for this product was higher in the past and likely has been lowered to compete against FWA.
  • The other offer is ongoing and doesn’t end on February 1. Comcast will provide 800 Mbps download speeds for $60 per month, which requires autopay. This is also a two-year term, with the first year under a contract.

Comcast then adds hidden fees to the special price. Unless a customer brings their own modem, Comcast charges $15 per month for a WiFi modem, a price that was increase by $1 this month. In many markets, Comcast also has data caps, and customers that exceed 1.2 terabytes of usage per month are charged $10 for each additional 50 gigabytes of data used in a month.

For the 400 Mbps product, a customer who brings a modem and who doesn’t exceed the data caps will pay $30 per month if using a bank debit and $35 per month with a credit card debit. Using the Comcast WiFi modem (which most customers do), raises the monthly price to $45 or $50 – right in line with the T-Mobile FWA product. But the kicker comes at the end of the term when the price, before a cable modem, jumps to $92 per month, and $107 with the modem. The result at the end of the 800 Mbps special is similar, with the price rising to $97 per month before a WiFi modem. Anybody buying the special today must also worry about whatever rate increases Comcast adds to the base broadband price by 2025.

The special prices offered by the big cable companies are alluring – customers can get a significant discount for a year or two. But inevitably, the prices will skyrocket – and in the case of the 400 Mbps special will more than double at the end of the discounted special.

ISPs that compete against the big cable companies have learned that all they have to do to compete is to offer fair prices and wait out the specials. Over time, customers who get tired of the pricing yoyo will come around. ISPs with fiber tell me that customers that come to them from a cable company almost never go back to cable. Customers appreciate fair pricing with no games and a reliable broadband product that delivers the promised speeds – that’s how you compete against the big ISPs.

The Industry

Fearing the Competition

Over the last six months, practically every big carrier in the industry has made a formal announcement that they are not worried about specific competitors. The latest one I read was in LightReading where Nick Jeffery of Frontier said he’s not worried about competition from the cable companies upgrading to DOCSIS 4.0 or from cellular carriers offering FWA home broadband. Frontier is building a lot of fiber, and Jeffery was commenting that he thinks fiber is a superior technology compared to the alternatives. To be honest, this might be the only claim I read where the ISP was being truthful. Frontier has been at the bottom of the heap in the industry for many years and led in the percentage lost broadband and cable TV customers quarter after quarter. It’s got to be refreshing for the company to be deploying a technology that gives it a fighting chance to succeed.

I’m not citing all of the other CEOs that said the same thing – but these announcements were pretty much across the board – basically, no carrier is afraid of other competitors.

I’ve seen all of the big cable companies quoted as saying they aren’t afraid of FWA cellular broadband. And yet, in the second quarter of this year, T-Mobile and Verizon added over 800,000 new customers, while the large cable companies collectively lost 150,000 customers during the quarter. The cable companies rightfully say they have superior technology when competing against 100 Mbps download speeds, but the FWA cellular carriers have much lower rates and are attracting customers who think that cable broadband costs too much.

The big telcos that are building fiber have all made the same claim about not fearing FWA wireless. The big telcos collectively lost less than 100,000 customers in the second quarter of this year, the best they’ve done in ages. The small loss disguises the fact that the telcos continue to lose DSL customers but are largely replacing them with fiber customers – except Lumen, which had a net customer loss for the quarter of 93,000.

I’ve seen most of the big fiber overbuilders scorning cable company broadband and saying they aren’t worried about DOCSIS 4.0 – like Frontier said. That’s a fairly easy thing not to fear for now since we’re a number of years away from any conversions to DOCSIS 4.0. But Comcast and others are talking about soon introducing some of the higher split technologies on DOCSIS 3.1 to boost upload speeds sooner. Will fiber overbuilders fear the cable companies more after some upgrades?

The WISPs that will be installing new versions of fixed wireless, including some technologies that claim to be able to deliver speeds up to a gigabit, say they are not afraid of competing against rural fiber networks built with grant funding. That’s an interesting claim since the general public seems to have grasped that fiber is better. It will be interesting to see what happens in places where rural fiber competes against fast rural broadband.

The big three cellular carriers all claim they are not afraid of Dish Network becoming the fourth major cellular carrier. It’s an odd claim to make since Dish says the only way for it to gain market share is to be extremely aggressive with prices. The cellular industry is already highly competitive, and it can’t be good for any of the bigger carriers to have to lower rates.

I get a chuckle every time I read one of these statements because when a carrier goes out of its way to mention a competitor, it is worried. The reality is that every carrier in a competitive situation has to be concerned about competitors. In the end, this is a battle that is going to be fought at the local level, market by market. I can picture that the various technologies will get a different reception depending on local factors. But for now, apparently, nobody fears the competition.

The Industry

Cable Company Cellular Growing

Cable companies are starting to quietly build a significant cellular business to bundle with broadband and other products. Consider the most recent customer count from the eight largest U.S. cellular carriers:

Verizon 143.0 M
T-Mobile 110.2 M
AT&T 101.6 M
Dish 8.5 M
US Cellular 4.9 M
Comcast 4.6 M
Charter 4.3 M
C-Spire 1.2 M

It’s worth noting that AT&T has over 200 million cellular customers worldwide, which makes them the eleventh largest cellular carrier in the world, with China Mobile first with over 851 million customers.

Comcast’s Xfinity Mobile added 317,000 customers in the second quarter of this year to bring the company to a total of 4.6 million customers. Comcast mostly uses the Verizon network to complete calls. However, Comcast demonstrates the major benefit of a cable company being in the cellular business since the company is able to offload a large portion of its outgoing mobile traffic to its WiFi network. Comcast has been experimenting with the use of 600 MHz spectrum to carry some of its cellular traffic. The company purchased $1.7 billion of spectrum in the 2017 incentive auction that freed up spectrum formerly used by television channels. Comcast also purchased $458 million of CBRS spectrum in 2020. The company says it may selectively offload traffic onto licensed spectrum in places where that is cheaper than buying wholesale minutes.

Charter’s Spectrum Mobile added 344,000 mobile customers in the second quarter of the year to bring the company to 4.3 million customers. Spectrum also uses the Verizon network. Charter purchased $464 million of PAL licenses in the CBRS spectrum in 2020. Charter says it intends to place its own radios in high-traffic areas where that will save money. Charter’s CEO Brian Roberts said a few months ago that Charter saw $700 million in new revenues from cellular over the past twelve months.

Altice has been selling mobile services branded as Optimum Mobile for several years and added 33,000 customers in the second quarter, bringing the company to 231,000 total mobile customers. Altice uses the T-Mobile network.

Cox announced the launch of a mobile pilot program on August 29, launching Cox Mobile in Hampton Roads, Virginia, Omaha, Nebraska, and Las Vegas.

All of these companies have a huge potential upside. For example, the mobile customer penetration rate for both Comcast and Charter is under 10%, and both companies believe they can become major mobile players in their markets.

The cable companies face an unusual marketing challenge since each cable company is only in selected urban markets, meaning that a lot of nationwide advertising goes to waste.

The primary reason that Comcast first entered the mobile market was to develop another product that would create a stickier bundle. Comcast figured it would be hard for a customer to leave if that meant finding a new cellular carrier along with a new ISP. Cable companies are still only selling to their own broadband customers, which is a good indication bundling is still a key reason for doing this. It’s also less costly to sell cellular to households that can offload cellular traffic to the cable company broadband network.

The big three cellular carriers have continued to grow in recent years, but the cable companies have definitely made a dent in the market with almost ten million retail mobile customers. The real test for the cellular industry is going to come when Dish finally gets its act together and offers low-cost mobile service in most markets. That’s going to put price pressure on everybody else. If Dish starts a price war, as promised, we’re going to see a real shake-up.



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Satellite Cell Service

T-Mobile and Starlink made a joint announcement recently about an arrangement where Starlink will enable voice and texting capabilities to T-Mobile cellphones by the end of 2023. This is a service that would work with existing cell phones and would supposedly kick in when a phone can’t find a signal from a cell tower. Starlink said the technology would be enabled by new satellites that have significantly larger antennae than the current satellites in the constellation. In the press release, Elon Musk touted this as being able to reach people lost in the wilderness, but the much bigger use will be to fill in cellular coverage in rural areas for T-Mobile.

While the two companies made a big splashy announcement about the arrangement, they are late to the game as other industry players already have similar plans underway.

AST SpaceMobile has been working on deploying satellites aimed specifically at the cellular market. The company plans to launch its first five satellites in 2024. The company’s business plan is to launch fairly large satellites weighing over 3,300 pounds to create a constellation dedicated to cellular coverage. The company has already created partnerships with more than 25 mobile operators around the world, including the giant cellular company Vodaphone.

Lynk is taking a different approach and will launch small satellites around the size of a pizza box. The company has one test satellite in orbit with another schedule this December. The company plans to have 50 satellites in orbit by the end of 2023. Lynk already has 14 commercial agreements in place and will support large corporations and governments as well as mobile providers.

Just yesterday, Apple announced that it will offer a texting service for those lost in the wilderness in a partnership with Globalstar. This service is going to be text only and is going to be exceedingly slow, but it will supposedly work for folks who have the latest iPhone and who also are able to point the phone directly at the satellite. There will be an app that will tell a user where the satellite can be found.

All of these plans raise a lot of questions that we won’t get answered until somebody has a working satellite product. For example, could somebody inside a vehicle connect to a satellite? I have no problem connecting to the Sirius XM satellite service, so this might not be a problem. Will these connections somehow roam and connect back to cellular carriers when the user is in reach of a cell tower? That would be really complicated, and my guess is that this won’t work. Mike Sievert, the CEO of T-Mobile said this project is like putting a cell site in the sky, but much harder – and I believe him. I’ve been trying to picture how the satellites will pick out the right calls because filtering through the many billions of cellphone calls to find the right ones sounds like a huge data processing challenge.

The service would certainly be a boon to somebody lost in the  woods, but this is a much-needed service for a lot of people. My consulting firm does surveys, and it’s not unusual to find rural counties today where 30% or more of homes say they have no cellular coverage at their homes. The national coverage maps of the big cellular companies are a joke in many rural places.

T-Mobile and Starlink said that these connections would be only for voice calls and texting at first but that using cellular data might be on the horizon. That would be a significant accomplishment since a receiver many times larger than a cell phone is needed today to communicate with a satellite.

The real potential for this product is not in the U.S. and Europe where a large percentage of folks can connect today to cellular networks. The real market is the many parts of the world where modern cellular towers are a rarity. Most Americans probably don’t understand or appreciate that there is still a lot of the world where folks are not connected, or perhaps only connected through one universal connection that is shared by a whole community.

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