Surveying more than 1,000 postpaid wireless customers, Jefferies found 41% said they’d be “very likely” to bundle wireless service into cable internet, TV and landline phone packages.
“Another 29% indicated indifference, which could imply additional room to win share,” noted the Jefferies survey report, spearheaded by analyst Mike McCormack. Meanwhile, among the subset of respondents who indicated that they would switch wireless carriers in the next 12 months, 76% noted a willingness to try a cable company’s mobile service.
The data comes as Comcast is already out in the market with a wireless service that combines usage of the MSO’s 16 million Wi-Fi hotspots with access to Verizon’s wireless network via an MVNO agreement signed back in 2011. Charter is developing a service with the same parameters. Both cable operators are basing their business models off of “quad-play” synergies.
The warm reception to cable wireless comes, McCormack wrote, as wireless customers gain increasing comfort with using Wi-Fi as opposed to LTE. Nearly 80% connect their mobile devices via Wi-Fi in the home, the survey said, while 44.1% rely on Wi-Fi at work. The number is 45.3% for those in public spaces.
“The data suggests that cable, or Wi-Fi-based offerings, could be appealing, particularly to price-sensitive customers who go over their data allotments,” McCormack said.
The analyst further notes cable operators should benefit from an overall wireless industry effort to develop Wi-Fi offloading technologies, with Verizon, AT&T, Sprint and T-Mobile looking to offset strained data capacity on their networks at a time when unlimited usage plans are being reintroduced.
“These developments make the value proposition of a network running on Wi-Fi more attractive, and cable’s strategy appears even more attractive,” McCormack noted. “While the utility of Wi-Fi to Wi-Fi handoff as a network replacement is yet to be proven, the vast portfolio of hotspots (i.e. Comcast’s 16 million) could imply more seamless experience over time, especially with Verizon’s 4G LTE network as the backbone.”
McCormack also said among the Big Four wireless carriers, Verizon is most exposed to competition from Comcast and Charter.
“Should Verizon subscribers recognize the benefits of bundling (single bill, potentially lower pricing), while maintaining Verizon’s network reliability, we could see incremental churn at the carrier,” McCormack added.