Cable Business MVNO Infocom Newsletter Protection of customer information that enters the US communication market

In September 2019, the MVNO service called Altice Mobile launched in the United States.This is an exceptional service of $ 20 per month and an unlimited use of audio data, which is causing a new breeze in the US telecommunications market.

Altice USA, which runs Altice Mobile, is a US subsidiary of Altice, a Western telecommunications carrier known for the brand of France and Numericable.Altice USA has been acquired in a row in the US cable business operators and CableVisions and CableVisions, and has now entered the U.S. Market, and has now gained more than 5 million contracts in the New York metropolitan area and the southern United States.are doing.The company announced in 2018 to launch MVNO services using Sprint's network.

After about a year of preparation, Altice Mobile has launched, but surprisingly, in less than a month, 15,000 contracts have been acquired.Some say that the number of contracts will reach 1.7 million by 2021.

Altice Mobile's destructive fee

The US cable market is increasingly strict in competition, and major cable business operators, COMCAST and Charter Communications, have recently begun to provide MVNO services.Both use Verizon's network, and in May 2017, Xfinity Mobile, the latter was launched in MVNO services for brands called Spectrum Mobile in June 2018.These are MVNO services that use Wi-Fi networks, that is, their own fixed network, and use Verizon's network only if Wi-Fi is not available.Regarding rates, both plans with unlimited voice and data are $ 45 per month, and Altice Mobile is less than half the price.Therefore, for ComCast and Charter Communications, Altice USA should be a pretty annoying competition.

同様に、ARPUが50ドル程度のVerizonやAT&Tにとっても、Altice Mobileは無視できない存在だ。また、月額20ドルという料金は、一般的に格安MVNOとして認識されることの多いBoost MobileやT-MobileのサブブランドであるMetroなどと比較しても、相当に安い水準だと言える。

Fig. 1 Fig. 1

The cheapest market even if there is no fixed service

In fact, Altice Mobile's monthly $ 20 per month has certain conditions.The condition is that it is necessary to join the SuddenLink Communications or CableVision fixed service, which is a subsidiary of Altice USA.This is a matter of course, given that fixed services are the basis of Altice USA.However, as mentioned above, Altice USA services are limited to New York urban areas and southern the United States, and does not extend throughout the United States.If any of the fixed services are not enrolled or cannot be subscribed, the Altice Mobile fee will be $ 30 per month.The important thing is that even if it is $ 30 a month, the use of audio and data is the cheapest mobile service for unlimited US markets.

Strategic reciprocal contract between Altice USA and Sprint

Let's explore the back side mechanism that realizes such a price.Notable is the business model.Altice USA has a MVNO contract with Sprint, but the two companies have a mutual benefit.Specifically, Altice USA provides MVNO services using Sprint networks, while Sprint uses ALTICE USA's fixed network to build small cells.

The general MVNO business model is ultimately simple and classic that the difference between the purchase price (wholesale fee) and the selling price (retail fee) is profitable.This is no exception to Xfinity Mobile and Spectrum Mobile, and the more contracts you get, the more costs you pay for the affiliated MNO.Because the business structure itself cannot be made a big difference, the general MVNO fee is likely to converge to a certain level, and it is difficult to differentiate between businesses.

FIG. 2] XFINITY MOBILE price plan (Source: Xfinity Mobile)

FIG. 3] Price plan for Spectrum Mobile (SPECTRUM MOBILE)

The relationship between Altice USA and Sprint is different, and because there is no cash out (even extremely limited), the cost is low.MVNO services, which are realized by reflecting this low cost in the service, are $ 20 per month.Moreover, the contract between the two companies is very complementary and strategic.In fact, Sprint's Tarek Robbiati CEO has no need to obtain a permit, such as acquiring a permit using a fixed network of Altice USA, and the lead until the small cell is operated compared to ordinary patterns.He commented that the time could be greatly reduced.Especially in the 5G network, high frequency bands including millimeters are used, so how to place small cells at high density is one of the challenges that any MNO cannot be avoided.Therefore, in exchange for MVNO contracts, it is a huge meaning to be able to obtain a wide range of fixed networks, which are the basis for building small cells that are essential for 5G networks.It can be said that the importance of New York, which is expected to be particularly demand, is very important in metropolitan areas.Furthermore, for Altice USA, if the Sprint network is enhanced, a virtuous cycle can be expected to enhance its MVNO services.

"MVNO based on full infrastructure"

The document submitted by Altice USA to the FCC (Federal Communications Commission) in 2018 is "((), is) a full infrastructure, and MNO's partner is indispensable.In addition to the statement that MNO's RAN (Radio Access Network) is only available, MVNOs based on full infrastructure like the Company have meaningful price competition and innovation.The degree of innovation is limited, as the main activity is to promote competition, including after -sales service. General MVNOs are the main activities of reselling services under MNO management.In addition, the difference between wholesale charges and retail fees managed by MNOs is insignificant, so it cannot be said that the competitive promotion effect is large. General MVNOs are just like MNO.You can check confident expressions such as the Company's full infrastructure, which is based on the full infrastructure of us. "

summary

The price of $ 20 per month is a destructive level, and Altice Mobile is reminiscent of the Free Mobile, which is newly growing in the French market as the fourth MNO in 2012 (Altice is France.It is naturally familiar with Free Mobile because it is the main market).However, as mentioned at the beginning, Altice Mobile's contract is about 1.7 million as of the end of 2021, and from the entire US communication market, it is only a small pie.。In addition, limited network service areas, which are the base business, may also be a shackle that hinders growth.

とはいえ、Altice USAのユニークなビジネスモデルは注目に値する。少なくとも、ComcastやCharter Communicationsといった上位のケーブル事業者との競争上では有利になるだろう。また、Sprintにとっても、上位の競合であるVerizonやAT&Tに対して、スモールセル展開にかかる時間やコストの面で優位性を得られるだろう。

The US telecommunications market is fierce and has a strong downward pressure at the rate level.Under such circumstances, Altice USA, which made a new entry as a very late start, brought in a new business model that has never been seen before.Regardless of the industry, new entrants that different business models are often threatened to exist existing businesses, and the trends are careful whether Altice Mobile will be a typhoon in the US telecommunications market in the future.It seems that we need to follow.