My Busted Record
By The PHANTOM –
Yeah, I know I’m sounding like a broken record, but I lose a lot of sleep worrying about competition. Craig is a well-known business analyst in the wireless telephone industry, and he recently was quoted as saying that if broadband convergence happens, it is likely to be the cable guys who win. Well, that set me to doing a little head scratching; I was dumb enough to think that convergence has already happened, but maybe not. One big cable industry company has recently defined convergence as “a single, unified infrastructure to serve the needs of multiple kinds of network traffic.” Gee, a long time ago I went with a single outfit for video, data, and wired voice to the extent that it still is a thing. OK, yeah that doesn’t include real voice communication, which is over-the-air now. Maybe that’s what “broadband convergence” has come to mean: Converging video, voice, and data on one communications medium, the current contenders being coax, fiber, and over-the-air. The latter is what a lot of folks tend to focus on now—it’s the only technology that can handle all services—and that is what 5G was supposed to make happen.
But it seems that 5G is off to a lackluster start if you believe what some pundits are saying. Ain’t no big surprise to this haunt! We predicted some time ago that 5G would not live up to the hype, which hype seems to have been believed by a lot of folks. (Undeserved pat on my back.) 5G was and is incredibly expensive to build out, so you need a lot of uptake to make money from it. It was talked about as if it would solve all sorts of problems and would enable a bunch of things that were already getting traction without it. Heck, 5G is a more bandwidth-efficient technology for wireless data, with some changes in protocol to optimize speed and use of that bandwidth. It got a lot of its claimed speed from using a whole lot of wireless bandwidth, which bandwidth was not and is not available in most places where said bandwidth is needed. Sure, there are some services, both existing and not yet developed, which will benefit from 5G. But it won’t live up to the hype. So take it for what it is, a significant but incremental improvement in bandwidth efficiency with the technical capability to take advantage of higher bandwidth where available and financially justified. But sigh, I already see people hyping 6G, whatever that is, as being the thing that fixes what 5G hasn’t fixed.
Anyway, back to cable, Pundit Daniel, who quoted Pundit Craig, says that 5G is “running in place” because the wireless guys haven’t reported growth ahead of inflation in a decade, and that includes the initial roll-out of 5G. He also said “If true convergence happens, cable operators are going to win the war.” Why? Well, for one thing (and this is my opinion, worth every cent you paid for it) we have a bit better cost model than the other guys, though we have been working hard to lose that lead. And the big thing is that we already reach, or can reach, almost every residence in the country, and the other guys still have a long way to go. Yeah, we’ve lost video subs, though we remain the largest video distributor in the nation. The lost subs have gone mostly to streaming, which we are also embracing. There is more shakeout to come in that biz, as the streaming guys are hurting from all the money they are losing. To a large extent, we think this is due to naivety on their part regarding what it costs to provide the service. Video does cost too much right now. The multichannel distributors, all of us, the program providers, and the sports people are gonna have to work together to solve this problem before anyone can make video pay.
We’ve lost some data subs to the competition because there is competition, and almost everyone who will take broadband is already taking it. The key now is to keep costs down so we can keep prices down, maybe even lower them, something we’re in a better position to do than are the other people.
But let us not get complacent. We may be in the best position for the future, but smart competition is there, and lets face it, some of that competition is putting in fiber, the one thing that is potentially an HFC killer long term. The competition doesn’t have our footprint. Yet. But all it takes is for us to lose sight of the ball for a couple of quarters and for 5G and/or their fiber to have a couple of good quarters, and we find ourselves on the losing end of the competition.
You never know when The “masked” Phantom is standing right beside you. Sometimes he is in a Zoom meeting or virtual SCTE training session with you. He may be hanging with the suits and other times with the front liners. But be assured, The Phantom knows all and, most importantly, The Phantom sees all!
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