CHTR - Charter Communications

[muscleman]

^ sure Vince I think we are more in agreement then not from reading what you say, certainly more than last time we discussed.  The biggest question is whether 5g can handle the data and whether it is reliable enough.  Those are big ifs.  I think if you compare cost required starting from nothing I think likely 5g broadband has a cost advantage due to less last mile costs but also because of the ability to spread the costs to more RGUs (ie 5g broadband is almost incrementally free).  That because being said cable is in a better position with the infustructure that is in place now because much of the fiber is needed both for cable and for 5g internet while cable companies don’t need the telcos network of towers.  That being said it’ll probably take 3+ years to build out 5g infrastructure for both mobile and broadband and then another 2+ years at least to convince people to switch to broadband if it works effectively.  So being in a cable company you have a lot of time you just need to watch the action and be intellectually honest about the potential of disruption.

 

Cam, I'm curious if you have information to support your assertion of 3 years to build out 5G infrastructure.  Do you mean starting from now? Or do you mean starting from a point in time where they have practical proof of a competitive product?  Thanks for the reply's.

 

I got it from this quora answer which had answers ranging from 2 years to 5 years:  https://www.quora.com/How-long-will-it-take-for-5G-to-be-fully-implemented (see the second or third answer).  You can also refer to this source:  https://www.digitaltrends.com/mobile/verizon-5g-rollout/ where they say several years.  Other people say it will take longer, but I'm trying to illustrate the worst-case scenario for cable which is still a 5 year wait (3 years to build 5g 2 years to take a share in 5g broadband (that I just made up but I think 2 years is probably on the low side to take significant share from a market leader)).  My point and I think the point you are making is even in the most optimistic case cable still has 5 years become the competition will be problematic if it does end up being problematic.

 

Sorry I don't understand how 5G will become a threat to cable. 5G is just a connection method between the cell phone and the cell tower. But data still needs to go from the cell tower through the broadband internet to be connected to the rest of the world. Doesn't CHTR benefit by allowing cell towers to connect to its broadband? Or do you think layout fiber should be cheap enough that wireless cos will not only deploy a massive amount of 5G towers but also lay out fiber to connect all these towers to the internet backbone?

[cameronfen]

^ sure Vince I think we are more in agreement then not from reading what you say, certainly more than last time we discussed.  The biggest question is whether 5g can handle the data and whether it is reliable enough.  Those are big ifs.  I think if you compare cost required starting from nothing I think likely 5g broadband has a cost advantage due to less last mile costs but also because of the ability to spread the costs to more RGUs (ie 5g broadband is almost incrementally free).  That because being said cable is in a better position with the infustructure that is in place now because much of the fiber is needed both for cable and for 5g internet while cable companies don’t need the telcos network of towers.  That being said it’ll probably take 3+ years to build out 5g infrastructure for both mobile and broadband and then another 2+ years at least to convince people to switch to broadband if it works effectively.  So being in a cable company you have a lot of time you just need to watch the action and be intellectually honest about the potential of disruption.

 

Cam, I'm curious if you have information to support your assertion of 3 years to build out 5G infrastructure.  Do you mean starting from now? Or do you mean starting from a point in time where they have practical proof of a competitive product?  Thanks for the reply's.

 

I got it from this quora answer which had answers ranging from 2 years to 5 years:  https://www.quora.com/How-long-will-it-take-for-5G-to-be-fully-implemented (see the second or third answer).  You can also refer to this source:  https://www.digitaltrends.com/mobile/verizon-5g-rollout/ where they say several years.  Other people say it will take longer, but I'm trying to illustrate the worst-case scenario for cable which is still a 5 year wait (3 years to build 5g 2 years to take a share in 5g broadband (that I just made up but I think 2 years is probably on the low side to take significant share from a market leader)).  My point and I think the point you are making is even in the most optimistic case cable still has 5 years become the competition will be problematic if it does end up being problematic.

 

Sorry I don't understand how 5G will become a threat to cable. 5G is just a connection method between the cell phone and the cell tower. But data still needs to go from the cell tower through the broadband internet to be connected to the rest of the world. Doesn't CHTR benefit by allowing cell towers to connect to its broadband? Or do you think layout fiber should be cheap enough that wireless cos will not only deploy a massive amount of 5G towers but also lay out fiber to connect all these towers to the internet backbone?

 

Yes telcos are already laying fiber to connect small cells to the internet backbone even if some of it is reproducing cable infrastructure.  This is the main threat.  That or telcos will use cables backbone via wholesale which is low margin and not very profitable (Note: I haven't read that wholesale is being used anywhere in this case I just know there are firms selling cable wholesale)

[muscleman]

^ sure Vince I think we are more in agreement then not from reading what you say, certainly more than last time we discussed.  The biggest question is whether 5g can handle the data and whether it is reliable enough.  Those are big ifs.  I think if you compare cost required starting from nothing I think likely 5g broadband has a cost advantage due to less last mile costs but also because of the ability to spread the costs to more RGUs (ie 5g broadband is almost incrementally free).  That because being said cable is in a better position with the infustructure that is in place now because much of the fiber is needed both for cable and for 5g internet while cable companies don’t need the telcos network of towers.  That being said it’ll probably take 3+ years to build out 5g infrastructure for both mobile and broadband and then another 2+ years at least to convince people to switch to broadband if it works effectively.  So being in a cable company you have a lot of time you just need to watch the action and be intellectually honest about the potential of disruption.

 

Cam, I'm curious if you have information to support your assertion of 3 years to build out 5G infrastructure.  Do you mean starting from now? Or do you mean starting from a point in time where they have practical proof of a competitive product?  Thanks for the reply's.

 

I got it from this quora answer which had answers ranging from 2 years to 5 years:  https://www.quora.com/How-long-will-it-take-for-5G-to-be-fully-implemented (see the second or third answer).  You can also refer to this source:  https://www.digitaltrends.com/mobile/verizon-5g-rollout/ where they say several years.  Other people say it will take longer, but I'm trying to illustrate the worst-case scenario for cable which is still a 5 year wait (3 years to build 5g 2 years to take a share in 5g broadband (that I just made up but I think 2 years is probably on the low side to take significant share from a market leader)).  My point and I think the point you are making is even in the most optimistic case cable still has 5 years become the competition will be problematic if it does end up being problematic.

 

Sorry I don't understand how 5G will become a threat to cable. 5G is just a connection method between the cell phone and the cell tower. But data still needs to go from the cell tower through the broadband internet to be connected to the rest of the world. Doesn't CHTR benefit by allowing cell towers to connect to its broadband? Or do you think layout fiber should be cheap enough that wireless cos will not only deploy a massive amount of 5G towers but also lay out fiber to connect all these towers to the internet backbone?

 

Yes telcos are already laying fiber to connect small cells to the internet backbone even if some of it is reproducing cable infrastructure.  This is the main threat.  That or telcos will use cables backbone via wholesale which is low margin and not very profitable (Note: I haven't read that wholesale is being used anywhere in this case I just know there are firms selling cable wholesale)

 

I see. I remember reading a post in this thread a few years ago that VZ tried to have fiber to home but found it too expensive so they only did it in New York and a few other big cities. But 5G allows them to lay a much smaller amount of fibers and let the cell towers connect to home.

Is CHTR and other cable cos doing anything to defend themselves? I am pretty puzzled with such a threat, the cable stocks (CHTR, CABO etc.) have had a strong run this year.

 

[scorpioncapital]

If wholesaling is unprofitable so is having your own network in an environment where your competitor is a wholesaler. Either the practice is not done at all or everyone does it.

[cameronfen]

^ sure Vince I think we are more in agreement then not from reading what you say, certainly more than last time we discussed.  The biggest question is whether 5g can handle the data and whether it is reliable enough.  Those are big ifs.  I think if you compare cost required starting from nothing I think likely 5g broadband has a cost advantage due to less last mile costs but also because of the ability to spread the costs to more RGUs (ie 5g broadband is almost incrementally free).  That because being said cable is in a better position with the infustructure that is in place now because much of the fiber is needed both for cable and for 5g internet while cable companies don’t need the telcos network of towers.  That being said it’ll probably take 3+ years to build out 5g infrastructure for both mobile and broadband and then another 2+ years at least to convince people to switch to broadband if it works effectively.  So being in a cable company you have a lot of time you just need to watch the action and be intellectually honest about the potential of disruption.

 

Cam, I'm curious if you have information to support your assertion of 3 years to build out 5G infrastructure.  Do you mean starting from now? Or do you mean starting from a point in time where they have practical proof of a competitive product?  Thanks for the reply's.

 

I got it from this quora answer which had answers ranging from 2 years to 5 years:  https://www.quora.com/How-long-will-it-take-for-5G-to-be-fully-implemented (see the second or third answer).  You can also refer to this source:  https://www.digitaltrends.com/mobile/verizon-5g-rollout/ where they say several years.  Other people say it will take longer, but I'm trying to illustrate the worst-case scenario for cable which is still a 5 year wait (3 years to build 5g 2 years to take a share in 5g broadband (that I just made up but I think 2 years is probably on the low side to take significant share from a market leader)).  My point and I think the point you are making is even in the most optimistic case cable still has 5 years become the competition will be problematic if it does end up being problematic.

 

Sorry I don't understand how 5G will become a threat to cable. 5G is just a connection method between the cell phone and the cell tower. But data still needs to go from the cell tower through the broadband internet to be connected to the rest of the world. Doesn't CHTR benefit by allowing cell towers to connect to its broadband? Or do you think layout fiber should be cheap enough that wireless cos will not only deploy a massive amount of 5G towers but also lay out fiber to connect all these towers to the internet backbone?

 

Yes telcos are already laying fiber to connect small cells to the internet backbone even if some of it is reproducing cable infrastructure.  This is the main threat.  That or telcos will use cables backbone via wholesale which is low margin and not very profitable (Note: I haven't read that wholesale is being used anywhere in this case I just know there are firms selling cable wholesale)

 

I see. I remember reading a post in this thread a few years ago that VZ tried to have fiber to home but found it too expensive so they only did it in New York and a few other big cities. But 5G allows them to lay a much smaller amount of fibers and let the cell towers connect to home.

Is CHTR and other cable cos doing anything to defend themselves? I am pretty puzzled with such a threat, the cable stocks (CHTR, CABO etc.) have had a strong run this year.

 

VZ was building fiber optic cable which is more expensive than coaxial copper cable.  One thing Cable cos are doing is getting into the mobile business as there is a good argument for cable-mobile convergence.  This is the MVNO agreements that all these cable stocks signed with a variety of telcos. 

 

@scorpiancapital I don't know much about wholesaling but I don't understand your point.  There are firms that wholesale already, mainly to other companies mainly in fixed line phones I think.  The reason people wholesale now is because you may need to use other people's cables to connect one person to another person over phone line.  From what I know, cable companies don't wholesale to MVNO equivalents because they aren't required to by regulation.  And the reason they don't is even though MVNOs can make money and they can make money from MVNOs this will cannibalize high margin revenue with lower margin revenue because MVNOs will have more purchasing power. 

[scorpioncapital]

What I mean is that isn't one of the values of a cable broadband company exclusivity? If your competitor is wholesaling their network how much higher can you price above that? The only thing I can imagine are better service (somewhat dubious in this industry) or better network (faster, more features).

[cameronfen]

^ sure but the price you are competing on is not the wholesale price but the price the wholesaler charges to the end user.  So there is a little room for taking profits but Even then telcos have done pretty well even with Mvnos. 

[vince]

^ sure Vince I think we are more in agreement then not from reading what you say, certainly more than last time we discussed.  The biggest question is whether 5g can handle the data and whether it is reliable enough.  Those are big ifs.  I think if you compare cost required starting from nothing I think likely 5g broadband has a cost advantage due to less last mile costs but also because of the ability to spread the costs to more RGUs (ie 5g broadband is almost incrementally free).  That because being said cable is in a better position with the infustructure that is in place now because much of the fiber is needed both for cable and for 5g internet while cable companies don’t need the telcos network of towers.  That being said it’ll probably take 3+ years to build out 5g infrastructure for both mobile and broadband and then another 2+ years at least to convince people to switch to broadband if it works effectively.  So being in a cable company you have a lot of time you just need to watch the action and be intellectually honest about the potential of disruption.

 

Cam, I'm curious if you have information to support your assertion of 3 years to build out 5G infrastructure.  Do you mean starting from now? Or do you mean starting from a point in time where they have practical proof of a competitive product?  Thanks for the reply's.

 

I got it from this quora answer which had answers ranging from 2 years to 5 years:  https://www.quora.com/How-long-will-it-take-for-5G-to-be-fully-implemented (see the second or third answer).  You can also refer to this source:  https://www.digitaltrends.com/mobile/verizon-5g-rollout/ where they say several years.  Other people say it will take longer, but I'm trying to illustrate the worst-case scenario for cable which is still a 5 year wait (3 years to build 5g 2 years to take a share in 5g broadband (that I just made up but I think 2 years is probably on the low side to take significant share from a market leader)).  My point and I think the point you are making is even in the most optimistic case cable still has 5 years become the competition will be problematic if it does end up being problematic.

 

Sorry I don't understand how 5G will become a threat to cable. 5G is just a connection method between the cell phone and the cell tower. But data still needs to go from the cell tower through the broadband internet to be connected to the rest of the world. Doesn't CHTR benefit by allowing cell towers to connect to its broadband? Or do you think layout fiber should be cheap enough that wireless cos will not only deploy a massive amount of 5G towers but also lay out fiber to connect all these towers to the internet backbone?

 

Yes telcos are already laying fiber to connect small cells to the internet backbone even if some of it is reproducing cable infrastructure.  This is the main threat.  That or telcos will use cables backbone via wholesale which is low margin and not very profitable (Note: I haven't read that wholesale is being used anywhere in this case I just know there are firms selling cable wholesale)

 

They do wholesale backbone and as I understand it, it is a lower margin business but I wouldn't use those same economics in a 5G world.  And I agree that using 5 years to give investors a measuring stick is probably a decent idea but I'm pretty sure it's well north of 5 years just for the infrastructure build.  However the telecoms will be capturing at least some share as they start to scale up.  I also want to be clear that it's obvious to me that at some point cable's share of broadband will peak and will be chipped away at the margins.  However, we aren't there yet and cable (at least Charter) has many things moving in a positive direction.  Ebitda margins are increasing as a higher % of revenue is coming from broadband which is, as you know a MUCH higher margin business.  Their legacy business capex is falling pretty dramatically on a per household basis.  Charter's ARPU is well below their peers and they do not charge for excess broadband capacity usage where their peers do.  They have 5 years left (and maybe less) on that acquisition requirement but in the meantime customers are training themselves to use as much capacity as they want which will be hard to reverse.  Their wireless business is growing which is a fantastic way to monetize all the wi-fi traffic (which is where most cell phone traffic travels) and give them the intelligence to build or buy wireless infrastructure, (if and when it makes sense for cable) putting more pressure on the telecoms to come to the table and realize the ENORMOUS synergies that they know exists from their European adventures.  They are partners with Comcast on their wireless initiatives which can be extremely positive.  I can go on and on but I think you said you are a cable bull anyway so I'm not arguing with you, just trying to clarify my position.  I used to hate my cable provider as a customer but as an investor, the cable business, considering prices of the last few years was (and probably still is imo) the best place to put my money.  Then, to be able to buy Charter (with Rutledge at the helm) at a significant discount thru Lbrda and have Malone on board to help navigate the ship just seemed to good to be true. 

[NotSoWise]

Guys, why not just sell right after Rutledge sold his package? Do you think you can make a better outside-in decision than him? Do you want to keep the shares after he sold out?

[skanjete]

Did anyone see this one yet? Interesting!

 

[Liberty]

Did anyone see this one yet? Interesting!

 

 

More interviews with Malone in this thread here, if you want more:

 

https://www.cornerofberkshireandfairfax.ca/forum/general-discussion/john-malone-the-full-d7-session/

[glorysk87]

^ The main issue is with 5g is not the fast that it is faster than cable, in fact it will likely be slower than cable, the issue is it is cheaper to build than cable.  You don’t need last mile fiber to the home, you just stick a small cell in every city block and then charge anyone who wants to use it a fee.  The question really is will it be reliable enough and have enough capacity to support data usage that is increasing 35% a year, and will telecos build their own infrastructure or buy out cable companies because it’s going to get built in urban areas one way or another.

 

I mean this with all due respect, I am not trying to insult you here - but you are flat out wrong in your assertions about 5G and cable, and you should probably stop posting things that you don't know much about.

 

5G is much more expensive than cable to connect incremental homes. There is the fiber build from the exchange, backhaul equipment, 5G electronics, cost of the radio sites, licensing/regulatory fees, etc. Assuming you have a 5G small cell that covers about a 1,000 foot radius, it would cost somewhere around $50k.  If you assume there are 100 'homes' in that radius, and they get 40% penetration (about on par with cable), the cost per subscriber would be ~$1,250. And those are somewhat generous assumptions. In all likelihood, the cost to build the cell would be higher and the penetration would be lower.

[Munger_Disciple]

 

5G is much more expensive than cable to connect incremental homes. There is the fiber build from the exchange, backhaul equipment, 5G electronics, cost of the radio sites, licensing/regulatory fees, etc. Assuming you have a 5G small cell that covers about a 1,000 foot radius, it would cost somewhere around $50k.  If you assume there are 100 'homes' in that radius, and they get 40% penetration (about on par with cable), the cost per subscriber would be ~$1,250. And those are somewhat generous assumptions. In all likelihood, the cost to build the cell would be higher and the penetration would be lower.

 

+1

 

$50K estimate is likely to be on the low side for a 5G small cell and it will not provide 1Gbps speed. In comparison, Charter spent $9 per home passed to upgrade its network from 100Mbps to 1Gbps speed.

 

Another thing to remember is that 5G mm wave signal performs poorly in the presence of trees, rain, hills, walls etc. So the performance to the end user varies depending on the environmental factors. At the end of the day, high speed internet is much more robust when delivered over a high quality wire (cable or fiber) than wireless. Main advantage of wireless is mobility and you generally trade off reliability for this. At a home reliability of high speed + low latency data connection is paramount and wifi connected to cable broadband gives you all the mobility you would ever need at home.

[scorpioncapital]

Anyone know the cost to go from current 1GBPS to full duplex 10GBPS '10G' via cable?

https://www.10gplatform.com/

 

I can't seem to see how they will implement the technology. It seems Intel is involved so maybe just a hardware upgrade?

[glorysk87]

Anyone know the cost to go from current 1GBPS to full duplex 10GBPS '10G' via cable?

https://www.10gplatform.com/

 

I can't seem to see how they will implement the technology. It seems Intel is involved so maybe just a hardware upgrade?

 

It's yet to be determined. There appear to be a few options. On one hand, it could be a hardware upgrade. On the other, they could likely achieve some of it by virtualizing their CCAP/CMTS to drive efficiency and lower hardware requirements.

[cameronfen]

^ The main issue is with 5g is not the fast that it is faster than cable, in fact it will likely be slower than cable, the issue is it is cheaper to build than cable.  You don’t need last mile fiber to the home, you just stick a small cell in every city block and then charge anyone who wants to use it a fee.  The question really is will it be reliable enough and have enough capacity to support data usage that is increasing 35% a year, and will telecos build their own infrastructure or buy out cable companies because it’s going to get built in urban areas one way or another.

 

I mean this with all due respect, I am not trying to insult you here - but you are flat out wrong in your assertions about 5G and cable, and you should probably stop posting things that you don't know much about.

 

5G is much more expensive than cable to connect incremental homes. There is the fiber build from the exchange, backhaul equipment, 5G electronics, cost of the radio sites, licensing/regulatory fees, etc. Assuming you have a 5G small cell that covers about a 1,000 foot radius, it would cost somewhere around $50k.  If you assume there are 100 'homes' in that radius, and they get 40% penetration (about on par with cable), the cost per subscriber would be ~$1,250. And those are somewhat generous assumptions. In all likelihood, the cost to build the cell would be higher and the penetration would be lower.

First your costs are out of wack, none of your costs are incremental costs.  If someone is in range of your small cell you don’t need more fiber.  If you are using cable you do need to build the cable to connect them.  You may need a 5g receiver, but I’m guessing at that point they will be built into all the computers we use and consumers won’t notice this cost.  Again cost of spectrum and site are not incremental costs!  By incremental costs I mean you have the infrastructure to serve other people in the neighborhood what are the costs of serving one more person.  The reason I justify this is because 5g isn’t being built for broadband, it’s being built for mobile.  Mobile companies are building the infrastructure anyway and so they might as well serve broadband customers as well.  However, even if we are talking about average costs, your analysis is faulty.  This is because 5g is designed for mobile phones not broadband, so at the very least you should be spreading the costs over some mobile customers as well, as that was the intention of the infrastructure. 

 

Edited to remove my emotional response in the beginning.  It was clear you thought I didn’t know what I was talking about (which is fair based on your misunderstanding of my point) and was trying to be nice.  Also I think maybe this confusion was caused by perhaps not reading my previous points further up thread, because reading just this comment it seems I was talking about total costs but this was in response to questions about my comments on incremental costs. Edited for spelling too. 

[cameronfen]

^ The main issue is with 5g is not the fast that it is faster than cable, in fact it will likely be slower than cable, the issue is it is cheaper to build than cable.  You don’t need last mile fiber to the home, you just stick a small cell in every city block and then charge anyone who wants to use it a fee.  The question really is will it be reliable enough and have enough capacity to support data usage that is increasing 35% a year, and will telecos build their own infrastructure or buy out cable companies because it’s going to get built in urban areas one way or another.

 

I mean this with all due respect, I am not trying to insult you here - but you are flat out wrong in your assertions about 5G and cable, and you should probably stop posting things that you don't know much about.

 

5G is much more expensive than cable to connect incremental homes. There is the fiber build from the exchange, backhaul equipment, 5G electronics, cost of the radio sites, licensing/regulatory fees, etc. Assuming you have a 5G small cell that covers about a 1,000 foot radius, it would cost somewhere around $50k.  If you assume there are 100 'homes' in that radius, and they get 40% penetration (about on par with cable), the cost per subscriber would be ~$1,250. And those are somewhat generous assumptions. In all likelihood, the cost to build the cell would be higher and the penetration would be lower.

 

Also I didn’t want to post this because I’m not confident in this but your cost per person is probably way too high.  According to the article below which just deals with capex spending for mobile in the UK the first 2 billion pounds of capex spending will cover 16 million people.  That comes in at 125 pounds per person in capex.  These are the people in urban areas which are the main and most economical candidates for 5g and 5g broadband and are the people we’ve been talking about.  Obviously UK has better spectrum allocated for 5g and this is mainly a cost per mobile customer but nevertheless your costs per person are an order of magnitude off from this research paper written by an expert.  See the text around figure 3 for the source.  https://www.sciencedirect.com/science/article/pii/S0308596117302781

 

Edit: Thinking more in depth, this is people covered not people under contract so you would have to multiply 16m by 30% or something to get a like for like number.  Your estimate is closer but still 2x more expensive at best. 

Edited for more spelling.  I was all hot and bothered by your post and so I wrote something quick do to time constraints.  Sorry for the spelling.

[glorysk87]

 

Also I didn’t want to post this because I’m not confident in this but your cost per person is probably way too high.  According to the article below which just deals with capex spending for mobile in the UK the first 2 billion pounds of capex spending will cover 16 million people.  That comes in at 125 pounds per person in capex.  These are the people in urban areas which are the main and most economical candidates for 5g and 5g broadband and are the people we’ve been talking about.  Obviously UK has better spectrum allocated for 5g and this is mainly a cost per mobile customer but nevertheless your costs per person are an order of magnitude off from this research paper written by an expert.  See the text around figure 3 for the source.  https://www.sciencedirect.com/science/article/pii/S0308596117302781

 

Edit: Thinking more in depth, this is people covered not people under contract so you would have to multiply 16m by 30% or something to get a like for like number.  Your estimate is closer but still 2x more expensive at best. 

Edited for more spelling.  I was all hot and bothered by your post and so I wrote something quick do to time constraints.  Sorry for the spelling.

 

Looks like we're talking about two different things. You're talking about 5G mobility, which is an entirely different product than 5G Home Broadband. They operate on entirely different bands of spectrum, utilize entirely different equipment, and have different use-cases. As for the cost estimates - I'm confident my costs are correct, and if anything are likely much too low.

 

More importantly - the link you posted is for a rollout in the UK, which is a profoundly different market than the US, and is not relevant to Charter. The UK has a population density of 710 people per square mile, while the US has a density of 87 people per square mile. This makes the economics exponentially more favorable (ie. cheaper) in the UK vs the US.

 

I don't want to be disrespectful, but I'm going to suggest we stop the dialogue now. I've spent the past 3 years covering the sector for the fund I work at, so I'm relatively confident in my analysis. You're absolutely entitled to an opinion/analysis of your own, so I won't try to convince you otherwise.

[scorpioncapital]

Has anyone contemplated what uses this huge broadband pipe is going to be used for by end-consumers? I mean, we have cable at between 1gbps-10gbps in the not too distant future. Even that is far more than I use or need even now. And those who build a 5g retail network what will they be able to charge as a monthly fee to justify the higher speeds and costs that some may not have any use for. But perhaps there is some application or something that will be the bandwidth killer of tomorrow? I understand for industry, professional setting but for end-consumer I struggle to find it.

[cameronfen]

 

Also I didn’t want to post this because I’m not confident in this but your cost per person is probably way too high.  According to the article below which just deals with capex spending for mobile in the UK the first 2 billion pounds of capex spending will cover 16 million people.  That comes in at 125 pounds per person in capex.  These are the people in urban areas which are the main and most economical candidates for 5g and 5g broadband and are the people we’ve been talking about.  Obviously UK has better spectrum allocated for 5g and this is mainly a cost per mobile customer but nevertheless your costs per person are an order of magnitude off from this research paper written by an expert.  See the text around figure 3 for the source.  https://www.sciencedirect.com/science/article/pii/S0308596117302781

 

Edit: Thinking more in depth, this is people covered not people under contract so you would have to multiply 16m by 30% or something to get a like for like number.  Your estimate is closer but still 2x more expensive at best. 

Edited for more spelling.  I was all hot and bothered by your post and so I wrote something quick do to time constraints.  Sorry for the spelling.

 

Looks like we're talking about two different things. You're talking about 5G mobility, which is an entirely different product than 5G Home Broadband. They operate on entirely different bands of spectrum, utilize entirely different equipment, and have different use-cases. As for the cost estimates - I'm confident my costs are correct, and if anything are likely much too low.

 

More importantly - the link you posted is for a rollout in the UK, which is a profoundly different market than the US, and is not relevant to Charter. The UK has a population density of 710 people per square mile, while the US has a density of 87 people per square mile. This makes the economics exponentially more favorable (ie. cheaper) in the UK vs the US.

 

I don't want to be disrespectful, but I'm going to suggest we stop the dialogue now. I've spent the past 3 years covering the sector for the fund I work at, so I'm relatively confident in my analysis. You're absolutely entitled to an opinion/analysis of your own, so I won't try to convince you otherwise.

 

Sure we can disagree but I do feel compelled to respond to your points since you are seeming to attack not only my arguments but my character.  If you think I’m not worth your time, feel free to not respond.  I appreciate you being respectful although you clearly think I’m an idiot and maybe I am as I haven’t admittedly worked 3 years on this. 

 

That said arguments: I am aware that the UK has higher population density than the US.  We were mainly talking about economics in urban areas and the UK has similar population density in urban areas as the US.  The UK just has more urban areas per land area.  Note the 125 pound capital costs number per person I was upfront about it being an urban cost. 

 

That said I will address your main point being no cost synergies between 5g broadband and mobility.  This person seems to think there are lots of synergies between 5G broadband and 5G wireless.  He seems to be writing for a credible if biased source and has 9 years of background:  https://5g.co.uk/guides/5g-vs-fibre-broadband/

 

Just so you think I’m picking one source here is a investor business daily that is more explicit about synergies and use of spectrum across both modalities:  https://www.investors.com/news/technology/5g-wireless-5g-networks-midband-spectrum/

 

I could be entirely wrong about this and maybe all this is fake news, and no I haven’t spent 3 years on this, but it’s not like I just plucked these ideas out of thin air.  A lot of people who write about this have the same beliefs as me, many of them relative experts at least compared to me.  Maybe we are all wrong, but I want to clarify it’s not that I didn’t source my material.

 

Edit: While you probably are correct in your points, for my own education honestly, I cannot find any sources that say things like 5g broadband and 5g mobility will use different spectrum, equipment etc.  The synergy honestly is something that I just assumed was the case from reading the articles and position papers I was reading. So For me to become a better investor in this company, if you do continue discussing, I would appreciate some sources so I can learn.  Honestly this is not passive aggressive at least consciously.  Can’t promise anything subconsciously. 

 

Edit 2: After more searching I found this article: https://www.google.com/amp/s/www.cnet.com/google-amp/news/stop-screaming-at-your-cable-box-5g-on-way/ . Apparently the answer is a compromise between our two points: while currently 5g broadband and 5g mobile are on different networks the long term plan is to merge the two.   

[cameronfen]

Has anyone contemplated what uses this huge broadband pipe is going to be used for by end-consumers? I mean, we have cable at between 1gbps-10gbps in the not too distant future. Even that is far more than I use or need even now. And those who build a 5g retail network what will they be able to charge as a monthly fee to justify the higher speeds and costs that some may not have any use for. But perhaps there is some application or something that will be the bandwidth killer of tomorrow? I understand for industry, professional setting but for end-consumer I struggle to find it.

 

Apparently my words are not to be trusted according to glory so do your own dd, but this is a point some people bring up.  You need like conservatively 15 Netflix HD movies running at the same time to saturate such speeds even on the low end (I didn’t look this up: this is based on memory and me being conservative), on the other hand broadband data doesn’t stop growing and grows 30% a year annually with mobile growing even faster.  If AR/VR takes off, more IoT that have to send lots of data back to servers, Autonomous Driving is a big data producer that all has to be sent to a server for analysis. 

[CorpRaider]

Interesting conversation guys.  Seems like Malone and others (from the cable side at least...e.g., cable labs nerds) are projecting a convergence of the fiber/cable networks and the mobile networks, from which I inferred that (at least based on the current projection of the relevant technologies by those holding this opinion) neither network architecture is obviously superior in all/most use cases (in the U.S. and Europe).

 

I kind of thought this meant that they see high speed fiber with like a wifi network as predominating in more dense areas and then sort of traditional wireless network coverage outside those areas.  Kind of like GoogleFI but with a company owned and operated network of wifi coverage. 

 

Of course, that is coming from sources with huge long bias to the cable/fiber industry. 

[cameronfen]

Interesting conversation guys.  Seems like Malone and others (from the cable side at least...e.g., cable labs nerds) are projecting a convergence of the fiber/cable networks and the mobile networks, from which I inferred that (at least based on the current projection of the relevant technologies by those holding this opinion) neither network architecture is obviously superior in all/most use cases (in the U.S. and Europe).

 

I kind of thought this meant that they see high speed fiber with like a wifi network as predominating in more dense areas and then sort of traditional wireless network coverage outside those areas.  Kind of like GoogleFI but with a company owned and operated network of wifi coverage. 

 

Of course, that is coming from sources with huge long bias to the cable/fiber industry.

 

Ya that was my thinking.  If you expect cable mobile convergence then 5g broadband and 5g mobile should converge too.  I think this is the case as I cited above. 

[glorysk87]

Sure we can disagree but I do feel compelled to respond to your points since you are seeming to attack not only my arguments but my character.  If you think I’m not worth your time, feel free to not respond.  I appreciate you being respectful although you clearly think I’m an idiot and maybe I am as I haven’t admittedly worked 3 years on this. 

 

I was very careful to choose my words so that it would not come off as an attack on you. Apologies.

[cameronfen]

Sure we can disagree but I do feel compelled to respond to your points since you are seeming to attack not only my arguments but my character.  If you think I’m not worth your time, feel free to not respond.  I appreciate you being respectful although you clearly think I’m an idiot and maybe I am as I haven’t admittedly worked 3 years on this. 

 

I was very careful to choose my words so that it would not come off as an attack on you. Apologies.

 

So maybe attack on character is a little harsh, but you may think I’m an idiot which is fair, but you were respectful.  I guess it was more the idiot part I felt I wanted to address as I felt you implied that I was getting my arguments from thin air (which sometimes is a bad habit of mine I admit), but in this case I think I felt I had sources (who could be wrong) but I wanted to put it out there that I’m not always just spouting nonsense.  You were entirely respectful though in my mind.