Mobile is the Only Way to Create an Integrated National Quadruple Play in U.S. Market

We sometimes hear talk of mobile-fixed convergence, or “quadruple play bundles” more often in context of Western European strategy than U.S. service provider strategy. There are good structural reasons for that divergence.

In Western Europe, it often is possible to assemble assets that provide mobile and fixed network coverage of nearly a whole country.

In the United States, the Federal Communications Commission and Justice Department historically have prohibited any single provider of mobile or fixed service from gaining more than about 30 percent market share.

For a fixed services operator, that means a key geographic limitation. A fixed network service provider cannot operate networks that pass or serve more than about 30 percent of potential customers.

Mobile operators, on the other hand, are free to build national networks, but cannot get more than about 30-percent market share.

That makes impossible the task of selling a quadruple play package (voice, entertainment video, Internet access, mobile) on a national basis.

One reason AT&T’s DirecTV acquisition helps, in that regard, is that it allows AT&T to create a functional quadruple play, with a national footprint linear delivery and then national ability to sell mobile services with voice, Internet access and mobility. In essence, AT&T is the first supplier to be able to sell a national quadruple play of sorts.

And other issues aside, that is why U-verse video marketing will remain limited to only some parts of the country. U-verse cannot, by definition, be a nationwide service.

For other service providers, creating and selling a true quadruple play, on a national basis, is not possible. “Integrated” quadruple play offers cannot be sold everywhere, but only to a fraction of potential buyers.

Only mobility and satellite TV are possible fully-owned, facilities-based “national footprint” services in the U.S. market. All other fixed network footprints, for legal or financial reasons, will be local or regional.

The only other provider potentially poised to replicate that footprint is Dish Network, which owns both nationwide mobile spectrum and the last independent satellite TV operation with national scale.

In that regard, you might regard “Binge On,” the T-Mobile US service that allows customers to stream video from 24 services without incurring data plan charges, as an attempt to create a functional quadruple play service.

That is why there also has been some interest in LTE-Broadcast, which although not a full-fledged way of replicating linear video services, offers support for point-to-multipoint “broadcast” video or content.

In the U.S. market, at least, mobile is strategically important for a number of reasons, including its status as the sole nationwide platform able to support all media types, if not yet every business model.

As entertainment video breaks from the traditional “broadcast” model, and becomes an on-demand medium, mobile service providers will be able to attempt becoming full functional substitutes for fixed network entertainment video.
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