“Wireless substitution,” defined as customers choosing to buy mobile service as a full substitute for fixed network voice, is a well-established trend in the U.S. and other markets.
So the obvious question is whether wireless substitution could happen for other fixed network services, such as entertainment video and even high speed Internet access.
With the arrival of fifth generation networks, and some innovations in both rating and offload, that could become a commercial reality for the first time.
And that will have implications for service providers, consumers, devices and network platform choices.
Ask Verizon. “5G has the capability to be a substitute for broadband into the home with a fixed wireless solution,” said Fran Shammo, Verizon Communications EVP. “The question is can you deploy that technology and actually make money at a price that the consumer would pay?
“If you think about 5G, 1 gig into the home it is a substitute product for (fixed network) broadband,” said Shammo.
One reason that will likely be the case is that consumer preferences, network architectures, traffic offloading and new spectrum will allow mobile service providers to consider new offers never practical before.
Efficiency, and therefore mobile data costs, provide one example. “So if you think about CDMA to LTE, we got about a four to five time cost reduction,” Shammo said. “You're looking at the same magnitude, maybe even slightly higher going from LTE video delivery to 5G video delivery.”
The rest of the business model has to be proven, of course. But the main point is that 5G will allow mobile service providers to consider wireless substitution for fixed network video entertainment and high speed access as never before.
And that almost assures us that wireless will be a bigger factor in access network revenues, going forward.