But it is not so clear. The reason is that telco revenue growth now is driven by mobility services, while the fixed network is vital substantially as a backhaul and offload mechanism, one might argue.
The simple fact is that it is irrational to over-invest in a part of the business that drives perhaps a quarter of revenues, and almost none of the revenue growth.
Telcos have to invest enough to protect the asset, but not so much they cannot earn a reasonable return on that investment. For cable operators, the business case is reversed: cable operators derive substantially all their revenue from services provided by the fixed network.
Though for both telcos and cable companies the challenge is to maintain relevance without overinvesting, telcos have the further requirement to shift investment into the mobile segment that actually drives revenue growth.
So it is not a surprise that the leading telcos seem to invest “enough” to remain relevant, but not much more.
Telcos will respond, should it be necessary, and many would note they already are doing so.
AT&T is the notable example, For U-verse customers, AT&T recently has announced speed increases to be in place by 2015, including an upgrade of about 90 percent of U-verse customers up to 75 Mbps and a further upgrade of 75 percent of U-verse customers to access at speeds up to 100 Mbps.
For IP-DSLAM customers, AT&T plans to supply 80 percent of IP-DSLAM customers with speeds up to 45 Mbps, and enable about 50 percent of IP-DSLAM customers with speeds up to 75 Mbps.
Some might argue that is fine for the moment, but will be superseded in turn by even faster speeds. Still, it would not be surprising if telcos lagged, and did not lead, the market.