4G entrants do not have a cost advantage but may drive consolidation. It will be difficult for 4G entrants to have a better cost structure versus large MSOs. First to churn last mile owners, 4G entrants will need to offer higher revenue share or buy them out at significant multiples. Similarly lower possibilities to get sweet content deals as well. Large broadcasters have their own distribution platforms and hence there is no reason for them to incentivise 4G entrants. Further
DTH sector accounts for 30% of subscription revenues for the broadcasters, hence content costs will need to be at a par with DTH. Similar to DTH, 4G entrants are late and cannot claim carriage fees. In other words cost structure for 4G entrants should be significantly higher versus large MSOs.
