What is the Value of the Fixed Network?

What is the strategic value of the fixed network in a mobile-dominated communications market? Ironically enough, backhaul. One way of looking at the volume of access is to note that, in 2013, about 59 percent of all traffic used “wireless” access. But that might overstate “mobile” and understate “fixed” access.

In 2013, 41 percent of traffic used a classic “fixed” connection, while 55 percent used Wi-Fi, according to Cisco. By 2018, perhaps 61 percent of traffic will be generated by  Wi-Fi connections, 15 percent by the mobile networks and 24 percent by the fixed network.

But if one assumes Wi-Fi is the default “in building” distribution, then as much as 96 percent of device traffic used an untethered connection. In 2018, the fixed network, despite mobile access growth, might still represent as much as 85 percent of all device Internet access.

In other words, the most important, and most dominant role for fixed networks is backhaul of Internet traffic.

The distinction between “mobile” and “fixed,” in that sense, is almost moot. By 2018, only 15 percent of traffic volume will directly use the mobile networks.

All the rest will be backhauled through the “fixed” network.

And, increasingly, even some of the “mobile” traffic will use unlicensed spectrum and the Long Term Evolution non-licensed access protocols (both LTE-U and license assisted access).

The present difference between the protocols is that LTE-U does not use “listen before talk” while LTE-LAA does use “listen before talk.”

LTE-U s likely to reach commercial use sooner, as it is allowed in China, Korea, India and the United States, markets big enough to drive early and massive adoption.

What remains unclear are the actual advantages in cost per bit using either form of LTE in unlicensed spectrum or just staying with Wi-Fi access as the complement to LTE.

In all three cases, though, the value of the fixed network is as a backhaul mechanism for the great bulk of device traffic.
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