Analyst: Cable MVNOs to steal 50% of all wireless customer additions by 2020

Charter, the nation’s third largest cable operator, is widely expected to launch its Spectrum Mobile MVNO in the coming weeks. And that effort likely will result in some serious challenges to the nation’s wireless network operators in the coming years.

“Wireless executives had been dismissive of cable's foray into wireless, and the economics of the MVNO model in an unlimited world; however, following Comcast's early success (Comcast added more phone customers than Verizon and AT&T in 2017), we think the companies, and investors, are more sensitive to this risk,” wrote the Wall Street analysts at Morgan Stanley Research in a note to investors this morning.

Specifically, the firm said it estimates that cable MVNOs will add around 2.2 million mobile phone customers in 2020, or almost 50% of the industry’s total net customer additions.

That forecast largely dovetails with a recent one presented by Wall Street analyst firm New Street Research. The firm said that it expects Comcast’s Xfinity Mobile MVNO to add double the number of customers in the fourth quarter of this year compared with last year—and the operation could eventually add 2 million customers per year “in short order.”

Separately, a survey from Barclays found that fully 40% of respondents would consider dumping their existing wireless provider and switching to wireless service offered by their cable supplier.

Those figures come amid increasing noise on the mobile front among the nation’s top cable operators. Already Comcast reported that it added 196,000 new subscribers to its Xfinity Mobile MVNO service during the first quarter, bringing its total customer base to 577,000. Those numbers were slightly ahead of most Wall Street analyst expectations.

And Charter is aiming for a June 30 launch date for the wireless service it will dub “Spectrum Mobile,” according to one report citing an unnamed source.

Separately, Altice USA recently named Jean-Charles Nicolas to lead its new mobile unit. Nicolas previously served as the deputy CEO and CFO of Altice’s Dominican Republic operation. Nicolas will oversee the development, launch and ongoing marketing strategy for an Altice mobile service, built on the back of an MVNO deal signed with Sprint in November.

Both Comcast and Charter’s MVNOs run on Verizon’s network; Verizon executives have said that the rise of cable MVNOs doesn’t concern the company since revenues from those operations ultimately sit on the bottom line of Verizon’s wholesale business.