- The AT&T/EchoStar deal leaves cable with fewer spectrum and MVNO options, said BNP Paribas
- AT&T’s Stankey doesn’t seem too interested in wholesale deals with cable
- But some analysts remain optimistic about cable’s competitive future
Change is afoot in the U.S. wireless market with EchoStar’s $23 billion spectrum sale to AT&T – a deal that also has implications for cable operators looking to make their mark in wireless.
AT&T’s gain could present a setback for cable companies, increasing their competition while hindering their mobile virtual network operator (MVNO) aspirations, according to BNP Paribas.
“We view this as a small negative for the cable industry, as this deal will bolster [AT&T’s] spectrum positioning, giving them growing capacity to offer [fixed wireless access] services,” the firm’s analysts wrote.
Cable’s MVNO prospects
Not only did cable operators lose another chance to get their hands on spectrum, but the consolidation of Boost also leaves them with fewer options for MVNO arrangements, BNP Paribas noted.
Charter and Comcast currently have contracts with Verizon to provide residential wireless services, and they will soon use T-Mobile’s 5G network to expand their presence in the wireless business market.
With Boost off the table, cable companies have “less long-term negotiating power with Verizon,” the analysts added. Cable’s existing deal with Verizon is set to expire sometime in early 2026, per New Street Research, and renewal negotiations are likely to start soon if not already.
But as one door closes for cable, AT&T may open another, Dell’Oro Group VP Jeff Heynen told Fierce.
“Honestly, I think this acquisition will allow AT&T to expand its wholesale business and offer another MVNO option to larger cable operators, where AT&T hasn’t really played thus far,” he said.
AT&T CEO John Stankey did talk up the value of a wholesale partnership with Boost, arguing it allows the company to expand to segments “where we’re not particularly effective.”
However, he seemed less inclined to strike wholesale deals with cable operators.
“When I think about cable under that construct, I don’t really think about cable as necessarily being an accretive partner per se,” he said in a call with investors. “I suppose there are places where that can occur but I’m doing pretty well right now picking up customers and share from cable, and I’m doing that at retail. And I’d like to continue doing that at retail because that’s probably the best equation for me.”
The future of cable and its spectrum
As cable companies grapple with continued broadband subscriber declines, they’ve pinned their hopes on wireless as a potential comeback path.
On the spectrum side, both Charter and Comcast have said they plan to use their Citizen Broadband Radio Service (CBRS) licenses to offload some of their MVNO traffic, which would reduce the payments they have to make to Verizon.
Charter earlier this year said its Citizen Broadband Radio Service (CBRS) deployments are in full swing, as it plans to launch radios in 25 markets by year-end. Comcast meanwhile hasn’t said much on how its CBRS expansion is going since it kicked off deployments in 2023, but it’s using that spectrum to deploy a private wireless network for the University of Virginia.
All told, Heynen doesn’t think the cable operators are currently interested in making a grab for more spectrum.
“I don’t think the major MSOs could stomach a spectrum acquisition right now, anyway,” he said. “Their main focus seems to be expanding their broadband footprint through consolidation and continuing with mobile expansion through MVNO relationships.”
Perhaps they can continue to do just that, even with AT&T as a bigger MVNO player. Cable companies “already have the pieces in place to compete effectively,” said MoffettNathanson analyst Craig Moffett, particularly with the T-Mobile agreement on the horizon.
“I don’t think the current Verizon deal is holding back the cable operators in any way,” he concluded.