Is FTTH Era Over, Next to Lead by Wireless?

AT&T and Verizon are pushing ahead with trials of pre-5G networks operating in fixed wireless mode. Though that might not make as much financial sense in many other markets, there is a very good reason why AT&T and Verizon feel fixed wireless is so important, as an early deployment strategy.

The reason is that they have lost the market share battle with cable companies for consumer internet access, and even full fiber-to-home network deployment would likely fail to change that. Even where Verizon runs ubiquitous FTTH networks (FiOS), it gets only about 40 percent market share.

If one assumes internet access is the core consumer service delivered over a fixed network, that is bad news, as it suggests even ubiquitous FTTH can change telco market share in consumer internet access.

That is a hugely important development. Even if FTTH can be deployed at lower costs, the business model might no longer work well enough to support full deployment. The hope always has been that FTTH costs would drop low enough that fiber was a complete substitute for copper access media.

Instead, markets now have changed enough that even cost equivalency with copper is not enough. The new issue is the business model for ubiquitous fixed networks, which increasingly drive less revenue and profit for U.S. telcos.

Hence the interest in platforms that are even more capital efficient, can be built faster and at lower cost, while better leveraging core assets. Recent trends suggest telcos might be forced to move in a new direction, as they now are losing the internet access business to cable, and even full FTTH might only halt losses to the point where telcos get about 40 percent share.

In other words, FTTH might no longer provide any hope of retaking leadership in the consumer internet access business.
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