Cable gets its wireless backhaul groove on

As I finally wrap up my special report on the top ten wireless backhaul wholesalers (you can read Part 1 today and then Part 2 on Thursday), I can't help but think about the cable industry's drive into this industry segment. After engaging in one of my many ongoing online conversations with Joe Kestel, Director, Consulting & Industry Analysis for New Paradigm Resources Group (NPRG), about how Qwest is making a name for itself in wireless backhaul, our conversation turned to the cable guys. Joe brought up a couple of interesting points in our talk. The most obvious point is that while telco TV is far from mainstream, cable does need to find new revenue sources to stay competitive with the telcos, and I think a two-pronged approach that incorporates business and wholesale backhaul services could fit that bill.

"As far as cable focusing on backhaul: In some ways, this is the natural order of things," he said. "The telcos are applying pressure in consumer video, while the wireless backhaul market is set to explode-capturing a modest sliver of that growing pie, along with a greater share of the business market, helps offset any losses."

But our thoughts seem to be more than just random musings and predictions. Cox Business, Charter Communications and Time Warner Cable all noted during the recent The Future of Cable Business Services conference that they are all expanding their business and wholesale services with fiber and Ethernet service capabilities.

Beginning its life as a wholesale carrier selling fiber-based connections to IXCs over a decade ago, Cox Business is an obvious fit for wireless backhaul. To get there, the MSO has taken a multi-purpose approach to wireless backhaul where it will build fiber rings in certain areas that will simultaneously accommodate both business and potential backhaul opportunities. Slightly behind Cox is Charter Communications. Fresh from bankruptcy, Charter, while not nearly as revealing as Cox Business, said that it is getting a lot of interest from potential clients and as such it plans to expand its staff and network capabilities to meet potential wireless backhaul demands. Then, there's Time Warner Cable (TWC). Although it did not mention backhaul in a recent speech about business services, it's not hard to imagine that its emphasis on expanding Ethernet capabilities would likely include a wireless backhaul play. TWC was one of the first MSOs to sponsor the TMForum's wireless Catalyst to better understand OSS issues that could affect a wireless backhaul roll out. 

But just as much as Kestel and I are in agreement that cable can be a major wireless backhaul player, it does face two challenges: getting over the perception problem that they are residential providers and having the resources to support large-scale deployments.

"Because they're newer to this space or have been doing it on a smaller scale, they're facing a fairly steep learning curve," Kestel said. "Even if a company has the technical competence to provide the service, cablecos have to set up administration and support for some very demanding customers: it's a different beast than most are used to with their consumer and even business customers. And finally, because backhaul tends to be arranged on long-term contracts, there are limited opportunities to capture new business."

Yes, cable certainly will face challenges in becoming a wireless backhaul provider, but as wireless operators look for options besides the local telco, cable has a good chance at being a viable alternative player if it plays its cards right.