Mobile substitution is about to become a much-bigger commercial and policy issue, in large part because, for the first time, mobile substitutes for fixed network internet access are going to be commercial realities, sold by tier-one service providers with the marketing muscle to drive adoption.
History provides some idea of how much could change.
Once upon a time (in the 1970s and 1980s), it was believed the solution to the problem of universal communications had to be based on supplying connections to fixed networks. The great cost of building such networks in developing nations was therefore a great cause of concern.
Technology saved us. With the advent of mobile networks, we have nearly solved the problem of voice communications, globally. But there always are consequences for legacy products when new products displace them.
Over a span of less than two decades, voice services, the traditional telecom revenue driver, has virtually collapsed, in some markets. In the U.S. market, for example, line loss for telcos has been as much as 87 percent, between 2000 and 2018.
Ironically, the Telecommunications Act of 1996, the first major revision of U.S. telecommunications law since 1934, focused on enabling voice communications and ownership of voice switches. The emergence of the internet, and mobile substitution, seemingly had not occurred to lawmakers.
The point is that commercial business strategy and government regulation, no matter how thoughtfully considered in the moment, can fail to achieve its intended objectives because markets (both supply and demand) now change so rapidly.
Beginning with the 5G era, we are likely to find that technology once again solves an qually big challenge, namely supplying internet access to everyone. Nor is 5G the only important platform. We might well see that new constellations of low earth orbit satellites, and perhaps fleets of balloons or orbiting unmanned aerial vehicles, plus use of unlicensed and shared spectrum access platforms.
There are going to be winners and losers. It is not hard to predict that the business value of a fixed network will change. Such networks are going to drive far less revenue than in the past.
And that has implications for the amount of capital that can be invested in the business, where that capital is invested and how much innovation can be expected. Some of us would argue that enterprise revenue sources will become more important, consumer sources less important.
In the 5G era, it is possible that mobile networks and platforms will be able to match fixed network performance. On top of that, low earth orbit satellite constellations, or even Google’s Loon service, based on use of balloons, might be in place to provide rural internet access across the rural United States.
Even if some worry that competition in internet access is endangered, some of us would argue competition is destined to increase.