Is Broadband Access One Market, or Many?

It isn't always easy to figure out what a "product" is, for purposes of plotting that "product's" life cycle. Is landline voice "one product," or a series of products that have been offered over the years? Similarly, is "Internet access" one product, or several?

The answer matters, as we can assume any product, including broadband access, will have a product life cycle. But we have to agree on what “the product” is, before we can figure out how to understand the life cycle.

Some might argue that “Internet access” is  the product, with successive new generations of products simply reflecting better ways of supplying “Internet access.” 

That view would make dial-up, slower speed DSL or cable modem services and now 300 Mbps services products one category. Product managers might not agree, and for good reason. One can plot the rise and fall of "dial-up" Internet access quite distinctly from the adoption of high-speed access services.

The precedent, one might argue,  is “voice service.” Over time, the industry has evolved through various types of switching and access technology, but the product category always has been “fixed network voice.” 

In a business sense, we can count the number of subscribers served by specific switch technologies, but the business-relevant distinction has remained “total number of lines in service” (access lines in service).

Using that analogy, all forms of Internet access represent one product category. But few are likely to accept that definition so readily.

For starters, there is the simple matter of lead applications for various types of Internet access.

The "killer app" for “dial-up Internet access” was email. That isn't exactly true for the early generations of broadband services, which tended to shift the lead apps to visual Web apps.

Now, streaming video and audio seem to be the lead applications, even though a variety of apps are used by most broadband customers. But as we push to speeds routinely above 20 Mbps, it is likely new lead apps will develop. 

Also, there is the matter of mobile broadband access, which arguably gets used in different ways than fixed access. Are those examples of two distinct markets, or one market with segments?
The answer might matter since, In many developed markets, the “fixed network Internet access” product is reaching saturation, where every consumer who wants the product already is buying it. To refresh product lines, and earn more revenue, service providers are relying on faster speed services that sell for higher prices.

But the faster-growing segment is mobile broadband. China, for example, has seen fewer fixed broadband subscribers over the past year, instead of growing. 

In other words, fixed broadband accounts actually declined, as users apparently decided to spend their money on mobile broadband, rather than fixed broadband.

Chinese Internet users reached 530 million over the past six months, but the broadband subscriber base actually shrank as mobile became the most popular way for users to get online for the first time, a report by the Chinese government suggests.

Of those users, some 380 million were fixed broadband users, down from 396 million in December 2011, and 388 million were mobile internet users, up from 356 million.

So “mobile broadband access” appears to be a substitute and new product, with a different life cycle, than fixed broadband.