Tuesday, December 19, 2017

Will U.S. Fixed Wireless Access Revenue Be Bigger than U.S. Consumer Satellite Revenue by 2021?

Will the U.S. fixed wireless business generate more consumer service revenue than the U.S. satellite industry by about 2021? Possibly, if fixed wireless grows as much as some predict, and if one does not double count AT&T revenue.

Keep in mind that both fixed wireless and satellite are tails on a big telco dog. Total U.S. mobile service revenues are on the order of $256 billion annually, with fixed telco revenues perhaps $100 million and cable TV revenues roughly $60 billion, representing annual industry revenues of at least $455 billion. Others might prefer higher figures.

Any industry segment with annual revenues in the single-digit billions represents a fraction of a percent of total industry revenues.

U.S. fixed wireless revenue will double from $2.3 billion to more than $5.2 billion, according to the Carmel Group. Accounts also will grow from four million at the end of 2016 to eight million by 2021.

Depending on how one chooses to count revenue, the fixed wireless industry might then rival satellite service provider revenue. One big issue is whether “DirecTV” revenue should be counted as “satellite” revenue or “telco” revenue. In fact, both industries claim that revenue.

Assume DirecTV generates about $36 billion in annual revenue for AT&T. Assume all U.S. “satellite services revenue” is about $52 billion, including $40 billion of satellite TV revenue. Take out DirecTV and U.S. satellite revenue (booked in the telecom industry as well) is about $16 billion, with perhaps $7 billion in consumer service revenues.

In that scenario, the U.S. fixed wireless business would generate as much, if not more revenue, than does the “consumer satellite” business.

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