Will Fixed Network Ownership Separate Mobile Winners and Losers?

Will ownership of fixed network assets ultimately prove to be the difference between market-leading and market-chasing mobile service providers?

Consider that “by far the greatest traffic generated by smartphones or tablets is linked to the use of Wi‑Fi associated fixed networks, rather than mobile networks,” according to the Organization for Economic Cooperation and Development (OECD).  

“Fixed networks have, in effect, become the backhaul for mobile and wireless devices with some studies claiming that 80 percent of data used on mobile devices is received using Wi‑Fi connections to fixed networks,” OECD says.

Communications Outlook 2013 says that revenues from data services are growing at double-digit rates in most OECD countries and, in line with the surge of broadband wireless subscriptions, are now the main source of growth for network operators.

But if traffic offload to fixed networks grows more important, one might argue that owners of fixed network infrastructure will have an advantage over competitors who do not own such assets, especially where mandatory wholesale at low prices is not available.

And advantages will be important. A recent examination of net income earned by the world's largest 100 service providers shows a "flat" revenue trend since about 2007. Under such conditions, most service providers in competitive markets will find revenue growth quite difficult.

That suggests more pressure to acquire firms and merge with other firms, and possibly an advantage for firms owning "offload assets."

Wireless and fixed broadband subscriptions in OECD countries
Post a Comment

Popular posts from this blog

Voice Usage and Texting Trends Headed in Opposite Directions

What to Do About Industry Challenges? "Take the Package," One Exec Quips

Verizon has a Brand Promise Problem