Asked under what circumstances Charter Communications would consider becoming a full-scale, facilities-based mobile network operator, Charter CFO Chris Winfrey indicated that’s not in the cards for the company.
“We’ve looked at it every way, and we’ve not found any economic case that would suggest we need to go down that path,” he said during a Credit Suisse investor event Thursday.
Charter, which has applied to bid in the upcoming CBRS 3.5 GHz auction, is engaged in an MVNO arrangement with Verizon, as is Comcast. The two likely ways in which Charter would become a full-blown wireless operator would be to either buy an existing macro cell tower operator or to go out and build its own network, and neither option is appealing, according to Winfrey.
“Because we have a very fruitful relationship with Verizon, for them and for us, and we can be a fast growing operator that’s putting traffic and revenue onto their network— it’s a much more attractive way to go,” using the umbrella coverage that Verizon offers and Charter’s own Wi-Fi network.
Charter already offloads more than 75% of traffic to Wi-Fi today, he noted, and it continues to deploy small cells in an opportunistic way to offload more traffic and improve economics at its own pace.
“That’s been our inside-out strategy and we haven’t found a scenario that really has a very positive relative payback of going out and trying to own that macro cell tower network, where frankly, most of the traffic doesn’t take place,” he said.
As for Verizon’s foray into the fixed wireless access (FWA) market using millimeter wave spectrum to offer its 5G Home Internet service, which competes with cable companies’ broadband services, he suggested the wireless nature of it makes it less reliable than the network that Charter offers.
“Does that mean that we shouldn’t be concerned about it? No, Verizon has a big balance sheet,” he said. “It will take a long time, and they will spend a lot of money doing it but … we have a fully deployed network in front of us. It’s high capacity, low latency already.”
Charter also has a clear path to upgrade beyond the speeds that are available today. “It’s really incumbent upon us to stay way ahead of any other competitive products. I think as long as we do that … I think we’re going to be OK.”
Besides CBRS, Charter also has been an active participant in the C-band proceedings and lobbied hard against the incumbent satellite companies’ plan for a private sale before the FCC decided it would conduct a public, FCC-run auction. Charter is both a beneficiary of earth stations in the C-band and a potential bidder for the spectrum.