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Mobile Voice, Data, Text: Unlimited for $20 a Month?!

Altice, parent company of cable operators Optimum (formerly Cablevision) and Suddenlink, earlier this month introduced a cellular service called Altice Mobile, following cable market leaders Comcast and Charter Communications in offering cellular service on a mobile virtual network operator (MVNO) basis — but doing so at a new price point for unlimited voice, data, and text.
 
The Altice Mobile service, which includes unlimited international talk and text from the U.S. to more than 35 countries, costs $20 per month, compared to $45 per month from Comcast and Charter. (Comparatively, in January 2015 Cablevision launched Freewheel, an even lower-cost Wi-Fi-only mobile voice and data service, at $9.95 per month. However, it cancelled the service 18 months later when the company agreed to be taken over by Altice.)
 
Altice Mobile service is available initially to the 3.3. million or so Optimum and Suddenlink customers. In addition, customers who live within Altice’s cable footprint (that the company claims touches 21 states) can get the service, at a price of $30 per month. You can bring your own handset or Altice will offer all of the popular models with 0% financing.
 
Altice had previously identified Sprint as the carrier whose network it would be using to deliver its mobile service. Since announcing that MVNO agreement, in late 2017, the companies have reinforced their link in a deal through which Sprint uses Altice fiber and pole access to install small cells throughout the Altice service area.
 
Objectively, Sprint might not be the best choice given its ongoing financial problems that leave it behind the other Tier 1 operators in deploying 5G. Even so, one big surprise that came with the Altice Mobile launch announcement is that Altice will also be reselling AT&T services along with Sprint’s. As yet, however, it hasn’t shared details on how the carrier selection would be made.
 
Data Dominates
It wasn’t too long ago when cellular was a voice business. Data struggled to contribute 10% to overall revenues and the carriers could get away with charging outrageous per-message costs for SMS. Today, talk and text are free, and what we’re paying for is data.
 
The crazy thing is that most cellular data traffic doesn’t actually travel on the cellular network, but rather on Wi-Fi. That can be your home Wi-Fi network, your office network, or any Wi-Fi network with which your phone automatically associates.
 
As a rule, carriers and device manufacturers go out of their ways to keep customers from knowing how they’re sending their mobile traffic. However, using tools for Android devices that can measure how much data traffic goes cellular versus Wi-Fi, FierceWireless and Strategy Analytics have found that over 75% of the data traffic goes Wi-Fi versus cellular. While these results come from analyzing traffic from Android users, the figures shouldn’t be any different for Apple users.
 
Technically, routing smartphone data to Wi-Fi is pretty easy, since Wi-Fi has been the default network selection for virtually every smartphone since the introduction of the iPhone in 2007. That selection can be overridden in some Android models, though I can’t see any reason someone would do that, given that Wi-Fi connections on the whole provide better performance than cellular data services.
 
A Good Business Move
The overall importance of data in the cellular plan and the ability to have Wi-Fi carry most of the load has created an opportunity for operators, such as Altice, that have Wi-Fi networks. Sprint’s rather tenuous financial position aside, Altice apparently was able to use its Wi-Fi presence in its negotiations with Sprint to set a resale price that allowed it to offer its $20-per-month unlimited plan. According to its Website, Altice has over two million Wi-Fi hot spots available to its customers. A lot of that base comes from its partnerships with Spectrum Cable, Comcast Xfinity, Brighthouse Internet, and Cox Cable in the Cable WiFi Alliance.
 
In short, Altice is betting that by carrying most of its customers’ data traffic on its existing Wi-Fi hot spots (or on the customers’ home or business Wi-Fi networks), it’ll be paying Sprint for far fewer gigabytes. Altice made that theme clearly evident in the road show that accompanied the announcement.
 
In an interview on CNBC, Altice USA CEO Dexter Goei identified his company’s offering as an “infrastructure-based MVNO,” whereas a traditional MVNO is essentially a mobile network service reseller. “We have our own core network, we control the SIM card, and we are able to manage the traffic that goes on and off the Wi-Fi network more accurately and seamlessly” than traditional MVNOs, Goei said during the interview. “That allows us to be a lot more cost effective in terms of what we pay to our roaming partners.”
 
What Does This Mean for Business Customers?
Most of the more than 100 MVNOs in the U.S. primarily serve consumers. The prospect of cable providers getting into the mobile business doesn’t faze T-Mobile CEO John Legere, who earlier this year was widely quoted as saying, “The farthest thing from my mind is any concern about the impact of cable.”
 
None of my large clients has ever shown the least interest in buying through an MVNO. However, organizations of that size can negotiate steep discounts from the Tier 1 operators, so the typical cost advantage of an MVNO is largely negated for them. Where we have seen some traction is between large users and CATV providers, particularly for broadband Internet service at their smaller sites — oftentimes for back-up purposes.
 
Small business is a different animal, and one for which “cost control” has a much stronger pull. Also, Altice’s Optimum Business unit has been making inroads in its cable service area offering combinations of cable Internet, TV (often for the waiting room), and a variety of business voice services.
 
Creativity has no size restrictions, however, and maybe Altice can come up with a fixed-mobile combination service that succeeds where similar offerings from the likes of Cisco and Microsoft have fallen flat. As the major mobile operators have now shifted their focuses so far away from “mobile” that AT&T is now being challenged by activist investor Elliott Management over its $80 billion diversification into Time Warner, maybe it’s time business users started looking elsewhere for mobile offerings that meet their needs — and save them money.

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