Cablevision Sees Alternative Path To Entering The Wireless Market


Cable operators are looking for ways to enter the wireless business as consumers disconnect their landline phones in favor of cell phones, and seek ways to connect their laptops while on the go.

Cox Communications is building its own cellular network from the ground up; and Comcast (NSDQ: CMCSA), Time Warner (NYSE: TWX) and Bright House have invested in Clearwire (NSDQ: CLWR) to gain access to the company’s high-speed broadband network. And now, Cablevision (NYSE: CVC) is cooking up something entirely different: it is testing a new mobile phone that can work with Wi-Fi and cellular networks.

In the company’s fourth-quarter earnings conference call, Cablevision’s COO Tom Rutledge answered questions about how it intends to roll out wireless services. He said the cable operator, which serves a small footprint in the New York, New Jersey and Connecticut, is trialing phones that switch between WiFi and cellular networks. “The test is so far proving to be good and consistent with our view of what is possible and gives us some hope that we will be able to launch additional products using the Wi-Fi network that will look like what some people think of as cellular telephone.”

The technology sounds an awful lot like UMA, which is used by T-Mobile USA, and allows people to roam between WiFi and the cellular network without even knowing it. UMA allows carriers to offload traffic from their more capital-intensive cellular networks to local area networks that are often paid for by the consumer in their own home.

For Cablevision, it’s a pretty good fit since it has invested heavily in building out a WiFi network for its customers in the areas it covers. To continue offering cellular coverage outside of that WiFi area, it would have to either lease capacity from a wireless operator, or build its own cellular network. According to an AP story, Rutledge said: “We haven’t made those decisions (about whether to build a cell network or lease capacity), but the latter outcome would be a less capital-intensive, higher-return business.”

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