Elaborating on his MSO’s appeal to the FCC to begin experimenting in new and proposed millimeter wave bands, Charter Communications Chairman and CEO Tom Rutledge said the company wants to try out those products in “several markets so that we can learn how to use them to our advantage competitively."
“I think 5G-type technologies or millimeter wave technologies or small cell, high-frequency, high-capacity, low-latency wireless networks are products that we will develop,” Rutledge said Thursday during Charter third-quarter earnings call with investment analysts. “They may or may not be connected to an MVNO relationship or a mobility relationship. I think that there are opportunities to create wireless drops in certain cases, so direct wireless connections that mimic a physical connection, to connect malls and other things in the enterprise space and buildings that are not contiguous or have big parking lots or, in some cases, low density areas, it might make some sense.”
In addition to submitting an application to begin experimenting with millimeter wave bands, Charter urged the FCC to authorize unlicensed use in the 70/80 GHz bands. High-band spectrum can “help close the broadband gap” in rural areas, Charter said, enabling users in underserved communities to access wireless broadband.
Rutledge said the millimeter wave efforts may or may not relate to mobility products Charter is potentially seeking to develop through its MVNO relationship with Verizon. He also described the timeline for the actual deployment of Charter wireless products as being longer term.
“As we go down the path of an MVNO, it doesn't mean that we launch in an immediate fashion,” Rutledge said. “It’s a substantial business and requires significant planning, and I would think that it would be well toward the end of the year, if not the following year, before the business is actually substantial, meaning end of 2017, following into 2018.”
"Wireless efforts will be slower to ramp than at Comcast given the blocking and tackling required to activate the Verizon MVNO,” said UBS analyst John Hodulik. “As a result, wireless is unlikely to be widely available until 2018.”
While Charter experiments and makes vague outlines for emerging wireless products, investors are nervous about the required investment. This was evidenced by the volatility of Charter’s stock price after Thursday’s solid earnings report, Barclays analyst Kannan Venkateshwar said.
“Charter stock was weak despite numbers which were relatively in line with expectations,” he noted in a memo to investors. “In our opinion, the weakness was likely on account of confusion around certain forward-looking comments made by the management. The company's comments on having ‘substantial’ wireless presence by 2017 obviously raise questions on potential spending on such plans.”