Spectrum, Regulation, and the Future of MVNOs

So the wholesale-only model is tough to maintain, despite ample promise. That leaves MVNOs with the option of working with Sprint, AT&T, T-Mobile, or another carrier to get the network access they need, and this is still a seemingly attractive option for lots of players, particularly companies interested in mobile data. Quamtel’s Datajack brand announced an extension of its deal with Sprint, using the carrier’s 3G network to offer prepaid mobile broadband plans. Likewise, Elevate just inked a deal with Sprint that would expand its access to Clearwire’s WiMAX network. 

Elevate had been a customer-in-waiting for LightSquared, but, like many other companies once betrothed to the would-be wholesaler, it moved on to a safer bet. 

In an environment in which it seems unlikely that a white knight will arrive to carry the network-less to wireless glory, what we seem to be seeing is a specialization of labor.

The deal between Verizon Wireless and Comcast/Time-Warner/Bright House could be seen as a détente for cablecos and telcos, with Verizon getting its hands on the cablecos’ underused wireless spectrum, and the companies cuddling up to resell each others’ services. Each company can ostensibly focus on what it does best, and can spend less time skirmishing over market share in areas outside of respective core competencies. 

In some ways, it’s a declaration of stalemate.  In other ways, it’s a return to form. 

But the game isn’t over just yet.

Dish Network, for example, is making moves towards acquiring its own 4G LTE wireless broadband network. The FCC has begun the process of making rules that would allow Dish to use segments of spectrum cleared for satellite use for a terrestrial network. This could make the perennial pay-tv bronze medalist a competitive threat in yet another area.

But wait. 

That rulemaking process won’t wrap until the end of 2012, in all likelihood, and the FCC didn’t give Dish a waiver to operate the network on a smaller scale in the meantime. That gives every other provider an even bigger head start on Dish, and has the leadership at that company even considering selling off that spectrum. 

So regulation, yet again, has proven to be a hobgoblin for providers looking to break into the wireless space.

Other ways?

So where do we stand?  Are cablecos and other carriers content with conceding the battle for wireless market share to the mobile carriers?  As consumers want more and more content delivered wherever they happen to be, is this a market segment they’re willing to lose?

Perhaps cablecos would rather take a lesson from the OTT players. They don’t own any infrastructure, and they seem to be doing a fair job of hacking apart aspects of service provider value propositions.

Through the use of mobile apps, mobile VoIP clients, and other backdoor methods that don’t add much in the way of revenue, but do improve customer satisfaction and brand stickiness, cablecos may find that hitchhiking can be as satisfying as driving. And it’s a whole lot cheaper.