What Will Mature Internet Access Lifecycle Look Like?

How soon will Internet access become a legacy product, past its peak of growth, in the U.S. and other markets where fixed networks have been a typical access platform? And, when that happens, what form will the decline take?


In other words, how soon will high speed access start looking like voice and linear video, products that have become saturated, to be followed by a decline? And, when that happens, what form will the decline take?

In the prior maturations, people simply stopped buying the product altogether. It is in many ways hard to envision that scenario for high speed access, if one assumes it is a foundation product for most other entertainment, communications and transaction services.

One possible outcome is that the market saturates, but does not actually result in abandonment. The market simply stops growing, but consumers keep buying. Decline then does not take the form of abandonment, but revenue decline.

The pattern there would be different than the cases of voice or linear video, where the actual number and percentage of people stopped buying. 

Instead, perhaps the matuation takes a different form. It is possible that revenue first flattens, and then declines, as people keep their connections, but pay less. 

In that sense, maturity would not necessarily involve abandonment, but only lower prices paid by consumers, and declining revenue for suppliers.

A traditional pattern based on substitution would have fixed access abandonment in in favor of Wi-Fi or mobile or some other new alternative, for example. That is hard to see, at the moment, but 5G could represent a breakthrough.

To some extent there is mobile substitution, where people choose mobile access rather than fixed access. Whether 5G can accelerate that process is the issue.

That we are close to saturation is easy to see. In 2015, 85 percent of U.S residents say they use the Internet. And many of those non-users do not want to buy. Still, the point is that we are within 10 percentage points or so of virtually complete adoption.

Market share shifts are the other issue. One might argue that cable TV companies will continue to take share from telcos. One might argue that third parties will take share from telcos and cable TV.

But if the market is saturated, and if telcos continue to substitute fiber connections for copper, even market share shifts will be more difficult.


Offline Population Has Declined Substantially since 2000



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