A Threat To The Cablopoly?

The Cable companies have a near monopoly.

Over the years, these companies raked in huge amounts of money off television, home phone, and high speed Internet. Of late, they are finding less people need home phones and they end up being a "throw-in" service. For more than a deade, the number of television subscribers has dwindled, something people expect to accelerate with the addition of Disney and other's streaming services.

What is still highly profitable is the Internet business. Broadband is not widely offered meaning consumers have few choices. There could be some change coming in the form of the Wireless carriers.


Source

5G is a technology that offers the speeds to compete with the cable companies. It is a technology that promises to deliver a much better product to the public than the typical wireless offerings. This will not come without a cost those since the carriers are looking at spending billions to get the system up and running.

That said, companies like T-Mobile feel they are an alternative to the present offerings the cable companies have. The same is true for Verizon, the second biggest carrier. This company is proposing the idea of home service for about $50 a month. This is down over 30% from the present pricing.

You would think this could make the cable companies shutter. The truth is that neither stock holders or executives are panicking. There are some major questions pertaining to the introduction of competition.

To start, a company like Verizon, in addition to setting up the system, will need to spend billions running fiber. This will take a while to blanket the United States. Executives at the cable companies know what is ahead of these carriers since they spend decades building out their systems.

Also, there is no telling how good the service will be once it is rolled out. One factor with cable is that it tends to be rather reliable. They seem to have no problem with loads, something the wireless carriers are constantly fighting.

So, is there cause for concern?

I would think so.

In my opinion, looking for a company like Verizon to offer nationwide converge or dismiss them as a threat is a mistake. The company is going to build out the more heavily populated areas. This will still take time but it will push the margins for the cable companies down since they will be aggressive with their offers.

There is also the fact that, it the new system is reliable, the benefit of bundling will come into effect. The cable companies leveraged this well over the years and they could see it turned on them.

All this is going to make for an interesting few years as these systems hit the market. The pricing and a lack of data caps will be crucial to see who wins. One advantage the wireless carriers will have, at least to start, is plenty of open space.

Of course, there is another piece to this entire puzzle (and one I think will crush them all): Starlink.

We will see thousands of satellites beaming connectivity down from space. This is another factor for all these companies to consider.


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