Analysts see 5G as the largest disruption threat to the cable industry

Verizon CEO Hans
Vestberg.

Kevork Djansezian
/ Getty

• Despite the hype, 5G speeds won’t seem that different
  from 4G LTE speeds for awhile.
• While mobile applications of 5G won’t seem that
  different, 5G fixed wireless broadband could disrupt the cable
  industry, according to analysts.
• Analysts see Verizon and TMobile as the biggest mobile
  carrier threats in the industry.

Conversations about wireless carriers’ race toward 5G are
ubiquitous. But the focus on the blazing speeds 5G will offer to
mobile customers might be misplaced. Instead, the biggest impact of the
technology might be delivering broadband within the
home. 

5G is the fifth — and next — generation of wireless
technology. It’s expected to deliver faster speed than the
current 4G LTE standard. But analysts in the industry urge
caution in overplaying the initial improvements from a mobile
perspective.

“It becomes a marketing opportunity to deliver 5G,” Michael
Rollins, a telecom analyst at Citi, told Business
Insider. 
“We expect the first mobile 5G
deployment to look and feel a lot like 4G LTE, while there
is a perception issue that 5G can be meaningfully faster.”

Cable disruption

But 5G does have an opportunity for disruption much sooner
in the fixed broadband market, according to Rollins.
The Citi report pegs telecom companies and cable operators
as businesses that could be displaced by wireless broadband
solutions.

It’s a threat the entire industry seems to be watching. “We
see 5G fixed wireless broadband as the largest existential threat
to broadband providers, by far,” analysts at Cowen wrote in their
quarterly cable update. 
“For now, the
largest threats are coming from Verizon and TMobile.”

On T-Mobile’s second quarter earnings call, the company
said it 
expected to capture 10 million new
broadband customers by 2024, a target which would be a large
majority of the entire cable industry’s broadband adds, according
to Cowen.

Following that call, stocks for the cable industry were
down 2.4%, on average.

And Verizon, the company leading
the race to 5G deployment, will roll out 5G broadband
service in Houston, Indianapolis, Los Angeles, and Sacramento
this year.

Verizon also announced it will give away free YouTube TV
service and Apple TV 4K along with 5G service to customers in
each of its four initial markets. The decision to offer bundling
of residential broadband service and live TV implies that
customers would be able to cut linear-TV subscriptions to get
similar programming for free, another apparent swing at
cable.

The company certainly seems to have disruption of the cable
industry in mind. 5G will give you “totally new innovation, how
you can disrupt industries, change the way you’re thinking about
technologies,” Verizon CEO Hans Vestberg said on
CNBC.