U.S. cable operators have for many years planned to use their fixed networks as a support for their mobile service efforts, initially offloading traffic from their mobile virtual network operator supplier networks onto the cable network whenever possible.
Now they are formalizing the model by creating new terminology: the hybrid mobile virtual network operator. The H-MVNO offloads mobile traffic from its wholesaler facilities to owned facilities whenever possible.
That means either the cable operator’s own 5G spectrum and Wi-Fi networks, both operated within its own fixed network footprint. Elsewhere, customer traffic is carried on the wholesale supplier’s network, such as Verizon in the case of Comcast.
The thinking is that since most consumers spend most of their mobile connect time in and around their homes, and since this is also the area covered by the cable operator’s fixed network, a majority of traffic can be shifted from the wholesaler’s network to the cable operator’s own facilities, thus saving operating expense.
The H-MVNO concept extends the existing “offload to Wi-Fi indoors” model to “offload to our own 5G network outdoors, within our service area.”
In 2018, for example, 75 percent of U.S. mobile device traffic moved over Wi-Fi, one study found. Also, globally, higher data usage is correlated with higher average revenue per account, driven mostly by volume effects, as price per unit is negatively correlated with usage.
If so, profit margins are helped when a mobile operator can supply demand either on its own facilities or offload to Wi-Fi (either owned fixed network facilities or another internet service provider’s network) where possible, as “gigabyte of usage” costs are lower on fixed networks, compared to mobile networks.
Also, generally speaking, higher profit margins are possible on owned infrastructure, compared to wholesale leased capacity.
Globally, most people continue to rely on mobile devices for all of their internet access. by 2025 or so, 73 percent of people will use mobile devices only for their internet access, according to the GSMA.
Traditionally, most cable operators have used a reseller-type “Wi-Fi first” MVNO, where the MVNO doesn’t own any mobile network infrastructure and resells the services leveraging mobile operator infrastructure.
In that scenario, cable operators expect to shift customer traffic onto their owned hybrid fiber coax networks whenever possible, to reduce the amount of wholesale capacity they must buy from their mobile network suppliers.
Some cable operators, though, have acquired 5G spectrum, adding another option for creating a more facilities-based network.
“This creates a new type of MVNO model called hybrid-MVNO (H-MVNO) that enables MVNOs to offload their subscribers’ traffic from the wholesaler network, not just to their Wi-Fi networks but also to the cable-owned mobile network,” CableLabs says.
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