The next big challenge for cable is providing seamless mobility

The dominant topic on day one of Cable Congress 2014 was how the cable industry should handle mobility, with a consensus that all cable operators will need a solution for providing mobile broadband to customers when they are out of home, whether for the delivery of entertainment content or for general data. Strategies could encompass mobile-cable mergers, as seen with Vodafone and Kabel Deutschland in Germany, the creation of MVNO (Mobile Virtual Network Operator) services, the mass roll-out of WiFi hotspots and ‘homespots’, and reciprocal deals where cable customers can use the WiFi networks of another cable operator when they are ‘roaming’.

 The cable industry is confident that it is well placed to benefit from the expected convergence of mobile and fixed line services. Rosalia Portela, CEO at ONO, whose company provides mobile services, declared: “It may surprise many people but as a fixed operator, we have a lot of strengths in a converging market. We have a clear advantage in terms of bundled products. We are the only company that can offer massively fast broadband and a very superior television platform. We are now acquiring two kinds of triple-play customers: those taking TV, voice and broadband and those taking fixed voice, fixed broadband and mobile.”

For ONO, mobile is a must-have service. “The Spanish market has developed very quickly into a convergence market and we have to sell bundles that offer mobile because that is what customers want,” she told the Amsterdam audience. “If you are not perceived as being relevant for both fixed line and mobile you will have trouble surviving now, so this is not a choice for us. It is important to note that today the differentiation factor in Spain is found on the fixed line rather than mobile, which is becoming a commodity. It is easy to compete on mobile with MVNO offers but not many operators can also provide a very attractive fixed broadband offering and a very exclusive experience on TV. We really believe that we have more advantages in the market today than we had before convergence.”

Mike Fries, President & CEO at Liberty Global, said the economics of an in-home WiFi connection that is hooked to a fixed line broadband service are compelling and will remain so well into the future. And that is why cable is in a strong position in the fixed/mobile convergence scenario. Bert Habets, CEO at RTL Nederland agreed that a fixed line will always be the lifeline into a household, but warned that consumers will quickly expect to see TV across every screen in that home.
    
Manuel Cubero, COO at Kabel Deutschland, which is now part of the mobile operator Vodafone, said there is a perfect and logical fit between the two companies. With cable operators expanding their public WiFi networks and more mobile operators looking for fixed line services, the logic for this kind of marriage is getting even stronger, he argued. In terms of business and marketing, the Vodafone brand, it 30+ million customers in Germany and its shops and distribution network are all huge assets. In terms of technology, the Kabel Deutschland HFC network can be used to provide connectivity between Vodafone mobile base stations. “The whole story is very logical,” he emphasized.

Later in the day, Lorenz Glatz, CTO at Kabel Deutschland, called the combination of mobile and cable networks, “The perfect storm in telecoms”. He explained that cable has the best fixed line infrastructure in Europe and people need to stay in touch in terms of both communications and entertainment when they are mobile. “There are so many areas where these two services will grow together,” he declared.  “I think eventually we will see the capability for roaming between WiFi and mobile networks, which will give us huge ubiquitous networks.”

Balan Nair, CTO at Liberty Global, pointed to the opportunity for reciprocal WiFi roaming agreements with other cable operators, both in Europe and the United States, especially given the rapid growth in WiFi hotspots and ‘homespots’. U.S. cable operators are already cooperating in this way. “This is extremely important. We already plan to cooperate with Ziggo so our customers can roam on each other’s networks but it would make so much sense for all operators in Europe to pursue this. Customers should be able to roam anywhere.”

Paul Hendriks, the CTO at Ziggo, believes the goal is to deliver the best performing ubiquitous broadband. “This is not a question of whether we should cooperate. We must cooperate to ensure customers get the services they want. His CEO at Ziggo, René Obermann, looks at service bundling as only the first step of fixed/mobile convergence. “The next level is to make the two services seamless, like offering one data package [for mobile and fixed broadband] and allowing customers to use all their devices against that data package.”

He predicted that there are many more elements of convergence to come, including the transition from ‘home zone’ to mobile when people depart their home, for example. “There is lots to do in order to provide true convergence so that customers feel they have the seamless service that they desire. This story has only just begun.”

Matthias Kurth, Executive Chairman at Cable Europe, the trade and lobbying association for the European cable industry, made it clear that his organization is ready to welcome mobile operators into its ranks, characterizing them as service providers who, like cable operators, are challengers to incumbent telcos. He looks forward to a future Cable Congress where the mobile industry is also represented.

Andrew Barron, Executive Chairman at Com Hem, who also worked at Virgin Media, outlined the potential revenue value of mobile to a cable operator and noted important differences between running a standalone mobile business and a cable mobile business. And he made the point that you do not have to have mobile to be a good cable company today, though he agreed that mobile will be a fundamental part of a cable service over time.

Ronny Verhelst, CEO at Telecolumbus, said WiFi is a given for cable operators. When it comes to 3G or 4G, cable operators must be ready to sell to individuals rather than to households and this introduces new complexities.

Diederik Karsten, EVP European Broadband Operations at Liberty Global, said the combination of WiFi and mobile makes the cable product complete. “It completes the voice experience, it completes the Internet experience and it completes the video experience,” he suggested. “New generations of customer will expect these products to come together. If your strongest competitor in a market is providing that then it is hard to imaåçgine a bright future unless you do it yourself, but each market has its own timing for when this is needed.”