After downgrading the cable sector last month due to fears about cord cutting and OTT distribution, media analyst Craig Moffett is once again bullish on the sector.
Cable, Moffett writes in a report released Monday, is on the ground floor of a technology, Wi-Fi, which will supplant cellular as the key means for getting online and making phone calls in public.
The time is coming when Wi-Fi will shift from being a 'secondary' network to being a primary one," Moffett writes. "Instead of thinking of Wi-Fi as an alternative to cellular where Wi-Fi is available, we will instead begin to think of cellular as a backup network needed only when Wi-Fi is not."
Cable operators, which are aggressively building out Wi-Fi networks, are best positioned amid a trend that promises to be profoundly disruptive, Moffett adds.
"While we recently moved to a more cautious view on the cable sector based on longer term risks to cable's video profit pool, cable's eventual entry into the wireless sector via a low-cost Wi-Fi-first network offers a potentially significant offset," Moffett adds.
Among cable companies, Moffett says Comcast (NASDAQ: CMCSA) is best positioned to profit in an era in Wi-Fi expansion.
For more:
- read this MoffettNathanson report (sub. req.)
Related links:
Moffett: Broadband regulation, resurgent cord-cutting pose 'wall of worry' for pay-TV
Cable profit margins set to reach 41.3% in 2014, best performance in 5 years
The top 5 reasons cable operators are making big bets on Wi-Fi
Cord cutting slows to only 400K subs a year, report says