Primary Reliance on Mobile Internet Access Grows in U.S. Market

Mobile Internet access is getting to be as important in the U.S. market as it is in many developing markets, as a primary, if not "the" primary way people get access to the Internet.

In 2014, the percentage of U.S. desktop-only internet users was 19.1 percent, while mobile-only users represented about 10.8 percent of Internet users.

In 2015, the share of mobile-only users has climbed to 11.3 percent, while the desktop-only population has declined to just 10.6 percent.

The vast majority of the digital population (78 percent) is multi-platform and goes online using both desktop and mobile platforms.

Still, the mobile-only user base is instructive. Even in the U.S. market, where fixed access and mobile access are relatively abundant, smartphones and tablets have become a primary method of Internet access.

That has implications for communications policy, not only the fortunes of Internet access, device suppliers, the consumer elecronics market and app providers.

In a similar way, mobile platforms accounted for 60 percent of the total time users spent interacting with digital media, up from 50 percent in 2014.

Also, mobile apps accounted for more than half of all digital media time spent in May 2015.

Those sorts of trends have other repercussions.

In a competitive market, one might well argue, the lowest cost provider among the contestants with significant market share, will win (some smaller contestants could well have even lower cost profiles, but no ability to scale).

And, as it has become undeniable that mobility continues to lead revenue growth and strategy in the broader market, what “cost leadership” looks like in the mobile space now is significant.

Without any question, Wi-Fi has become a core and foundational part of the access fabric for mobile devices and customers. “Ownership,” as such, is less important than “access.”

That roughly mirrors the structure of the Internet Protocol-based communications and application markets, where an app provider does not have to “own access assets,” but simply can use “any available access.”

So mobile service providers can “use” Wi-Fi assets without owning them. That directly affects thinking about investments in access assets. As it turns out, it is less expensive to rely on Wi-Fi for much, if not the majority, of “mobile” access operations.

In other words, encouraging users to go “untethered” on Wi-Fi benefits both users and carriers, as demand is shifted off the core mobile networks. That much is obvious.

Also obvious is that fixed network providers with dense backhaul networks stand to reap benefits as suppliers of small cell (mobile or Wi-Fi hotspots) networks, either for internal use or as a revenue-generating wholesale opportunity.

Just as obviously, any “mobile” service provider able to leverage such assets can change the cost structure of “mobility” services.

And that is precisely the opportunity cable TV operators believe they can seize. In other words, eventually, cable TV operators could emerge as the low cost providers in the mobile market, with implications for market share and leadership.