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Verizon and T-Mobile 5G can disrupt the cable business



Brian Roberts Sun Valley
Comcast CEO Brian

Getty / Scott

  • Analysts predict 5G could disrupt the cable
  • Wireless carriers, like Verizon and T-Mobile, could
    convert customers at Comcast and Charter to their fixed
    wireless home broadband service.
  • The analysts sketched out a “worst case” scenario where
    Verizon and T-Mobile could eat into 11.6% of the cable
    industry’s broadband business by 2024.

The threat that 5G poses to the cable business is so ominous that
industry analysts are trying to handicap just how many people
will cut the cord as a result. 

Specifically, some analysts are already taking guesses as to how
many customers will bail on cable giants like Comcast and Charter
if wireless carriers moving into fixed home broadband as

And the early estimates of how many homes at risk are in the

Cable companies provide fixed line broadband to homes, or
internet delivered through cables and that connect to a modem. 5G
fixed wireless broadband uses radio signals and installation
of an antenna outside of the home to deliver internet.

That’s scary for cable companies, which have made a killing on
wiring people’s homes for broadband.

“We see 5G fixed wireless broadband as the largest
existential threat to broadband providers, by

analysts at Cowen wrote in their
quarterly cable update

. “For now, the largest threats
are coming from Verizon and T-Mobile.”

Millions of cable customers may soon be up for grabs

The analysts laid out the possible encroachment of Verizon
into Comcast and Charter markets by noting 
initial four 5G cities —Houston, Sacramento, Indianapolis,
Los Angeles — all seem aimed at disruption. The four cities are
all markets where Verizon is not the incumbent carrier, meaning
there is room for growth in the market.

Comcast is the cable internet service provider in Houston,
Indianapolis, and Sacramento, and Charter is ISP in Los Angeles.

The analysts then drew up an illustrative example, looking at
similar markets for disruption around the US and identified
places where Verizon has made deep fiber investment and it’s not
the incumbent. The report estimated that these markets would
constitute 33 million households nationwide and determined that
Comcast would have 2.1 million homes exposed (or 8.3% of its
base) and Charter would have 1.1 million homes exposed (4.7% of
its base).

Of course, Verizon wouldn’t take 100% of these homes over, so
assuming the company had a 25% win rate, it could take about 2.1%
of Comcast’s customers and 1.2% of Charter’s, a limited risk, the
report notes. 

But the analysts sketched out a “worst case” scenario whereby
Verizon and T-Mobile could encroach into 11.6% of the 5G fixed
broadband market by 2024.

The whole industry seems to be taking
On T-Mobile’s second-quarter earnings call in
August, the company said it expected to capture 10 million new
broadband customers by 2024, a target that would be a large
majority of the entire cable industry’s broadband adds,
according to Cowen.

Following that call, stocks for the cable industry were down
2.4%, on average.

Comcast, for its part, noted that it has added 1.2 million
broadband subscribers over the past year as evidence of its
strength in the face of growing competition.

“Consumers today have high expectations when it comes to
Internet connectivity that go beyond just broadband speeds,”
said a spokesperson. “We compete everyday with providers that
offer different technologies, but consumers continue to choose
Comcast because we offer an unparalleled experience.”

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