Craig Moffett's extensive background in the telecommunications industry spans various roles and firms, showcasing his expertise and experience in the field.
The evolution of the US telecom market from a regulated monopoly to a competitive landscape underscores the ongoing tension between regulatory frameworks and business strategies.
The strategic significance of spectrum band selection for wireless companies, exemplified by T-Mobile's focus on mid-band spectrum for network competitiveness.
Deep dives
Evolution of Craig Moffat's Career
Craig Moffat started his career as an artist but transitioned to business, initially hesitant about telecom but later became a specialist in industries with no marginal cost. He worked at Boston Consulting Group, leading the global telecom practice before transitioning to Bernstein Equity Research House and finally co-founding Moffat Nathanson.
Telecom Industry's History and Challenges
The telecom market in the US has transitioned from a regulated monopoly under AT&T to a competitive market post the Telecom Act of 1996. The industry experiences tension between regulators advocating for competition and the microeconomics of businesses favoring monopoly structures. The history highlights the pendulum swing between competition and monopoly models.
Wireless vs. Broadband Dynamics
Wireless and broadband businesses face different challenges; broadband provides higher revenue per bit than wireless due to fewer market competitors. The business models and spectrum considerations vary, with mid-band spectrum suitable for urban areas and high-band spectrum like millimeter wave facing propagation limitations. Wireless companies are navigating spectrum allocations and market shifts to optimize profitability amid industry transformations.
The Importance of Spectrum Band in Telecom Strategy
The strategic importance of the spectrum band choice in telecom companies' network positioning is highlighted. T-Mobile's strategic advantage in selecting mid-band spectrum over Verizon's C-band is discussed. The impact of spectrum bands on network coverage, propagation advantages, and cost efficiency is emphasized. T-Mobile's focus on mid-band spectrum deployment is presented as a key factor influencing network competitiveness.
Challenges Faced by Cable Operators in the Wireless Market
The transition of cable operators into the wireless market and their competitive strategies are explored. The significance of leveraging existing terrestrial infrastructure for cost efficiency is discussed. Cable operators' approach of integrating Wi-Fi and cellular networks to offload traffic and enhance cost structures is detailed. The potential for cable operators to establish dominance in the wireless market based on infrastructure advantages is highlighted.
Craig Moffett has covered the telecommunications industry – first as a management consultant and later as a Wall Street analyst – for more than thirty years. He has been elected to Institutional Investor Magazine’s All-American Research Team in the U.S. Telecom and/or Cable & Satellite sectors on seventeen separate occasions, including nine separate appearances as the #1 analyst in America in either U.S. Telecom and/or Cable & Satellite.
Prior to founding MoffettNathanson, Mr. Moffett spent more than ten years at Sanford Bernstein & Co., LLC as a senior research analyst. He was previously the President and founder of the e-commerce business at Sotheby’s Holdings, the venerable auction house, where, in 1999, he led Sothebys.com to what was then the highest first year sales of any consumer website ever launched. Mr. Moffett spent more than eleven years at The Boston Consulting Group, where he was a Partner and Vice President specializing in telecommunications. He was the leader of BCG’s global Telecommunications practice from 1996 to 1999. While at BCG, he led client initiatives in the U.S. local, long distance, and wireless sectors, in both consumer and commercial services, and advised companies outside the U.S. in Europe, Latin America, and Asia.
Mr. Moffett graduated from Harvard Business School with Honors in 1989. He received a BA from Brown University, where he was magna cum laude and Phi Beta Kappa, in 1984.
Detailed Show Notes -
5:41 - Why Silicon Valley Bank is a good fit for MoffettNathanson
6:50 - Why telecom is a hard business
7:40 - The history of US telecom
10:10 - How cable incubated an industry under AT&T/telecom's business
15:52 - How does cable compete with fiber going forward?
17:47 - High splits, node splits, who gives a split?
22:50 - Cable strategy and why high splits are the current strategy
29:09 - Wireless vs. broadband going forward
35:00 - The physics of wireless
46:00 - Verizon's big strategic decision was correct but implementation left something lacking
51:10 - Cable's wireless offering and how it fits into the competitive set
58:44 - What does broadband's growth runway look like?
1:03:45 - How do fiber overbuilders factor into the future?
1:08:00 - The fiber bubble will burst. Then some Altice discussion.
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