U.S. Cable Operator Charter Launches MVNO

U.S. Cable Operator Charter Launches MVNO

Charter Communications, a U.S. cable operator, has inaugurated its own mobile service, called Spectrum Mobile. The cable operator has an MVNO agreement to run on the network of Verizon Wireless. Available only to Charter’s residential broadband customers, Spectrum Mobile offers nationwide 4G/LTE service and access to a national network of Wi-Fi hotspots, with a choice of unlimited services (with throttling) for US $45.00 per line per month or US $14.00 per gigabyte of data to be shared across lines, with no throttling.

Both service plans come with unlimited calls and SMS, and customers may switch their plans on a month-by-month basis. The data allowance is described as unlimited but is capped at 20 GB per month at full speed, after which speeds may be throttled until the end of the month. Use of a smartphone as a mobile hotspot is also limited to 5 GB at full speed.

Customers can purchase devices from Spectrum Mobile on no-interest monthly plans. Devices from Samsung and LG are available to start, and additional devices will be available soon, according to Charter.

Tarifica’s Take

Charter’s entry into the MVNO sector appears to be a competitive response to moves by other U.S. cable providers. Last year Comcast, the country’s largest cable operator, launched Xfinity Mobile service, which like Spectrum Mobile is only available to existing cable customers. Altice USA, owner of the cable operators Suddenlink and Cablevision, also has plans to launch MVNO service in the near future, according to reports.

In terms of competition, Spectrum’s pricing of US $45.00 for 20 GB is identical with that of Xfinity Mobile, while the price per gigabyte of shared data is US $12.00. Xfinity Mobile users also get access to Comcast’s TV offerings—200 on-demand channels and 40,000 shows and movies—through the Xfinity Stream smartphone app. If Charter intends to be fully competitive, it should strongly consider offering a comparable entertainment content streaming option to its MVNO offer.

On the other hand, Xfinity Mobile just announced this week that in order to keep prices for data connectivity low enough, it will be cutting the resolution of its video streaming to 480p from 720p, and reducing its hotspot service from 4G to 3G. If Spectrum Mobile can offer faster speeds (at least before throttling sets in) at the announced price, it will likely surge ahead in the race.

It appears that a trend may be afoot in the U.S. market for cable providers to exploit their pre-existing customer bases to offer multi-plays with mobile included. Given that MVNO launch strategies generally depend on incumbent customer bases, this situation is particularly good, in that companies such as Comcast and Charter have very large numbers of subscribers over a wide footprint for such basic home-based services as cable TV, landline internet and in some cases landline telephony. For customers who wish to simplify their lives and pay only one bill for all these plus mobile, without involving a separate MNO, these cable-based MVNO offers may be just right. And the price savings will be worth it for those customers who do not require very large amounts of top-speed data—Charter says that the mobile offer can save customers up to 40 percent compared to competing mobile services.