Thursday, July 18, 2019

Does WISP Market Share Explain Satellite Broadband Share?

Market share held by wireless internet service providers might explain why the number of satellite broadband accounts is not higher than its supporters believe can be the case. 

Satellite broadband and fixed wireless operators traditionally have targeted rural homes and small businesses as their primary market, in the past said to include as many as 35 million locations. But estimates vary widely. Some say 80 million people live in rural areas, others say 46 million do, using the U.S. Census Bureau methodology. 

 Satellite broadband providers seem to have three million subscriptions, though some estimates (wrong, in my opinion) suggest that  6.76 percent of U.S. internet subscriptions are provided by satellite. 

Assume there are 139 million U.S. housing units. That implies nine million U.S. satellite broadband subscribers. No estimate I have seen--ever--suggests there really are nine million U.S. satellite broadband accounts. 

HughesNet believes 18 million homes are its market opportunity. Rental units alone might represent 6.6 million units, although not locations, as some of those units are in multi-family complexes. 

According to Urban.org, 13 million homes are owned by rural residents. So one might conclude there are about 19.6 million rural dwelling units (not necessarily locations, which would be smaller by some measure). 

Those figures roughly accord with HughesNet estimates of market opportunity. 

A more conservative estimate is that perhaps two percent to three percent of U.S. homes are the primary target for satellite broadband. That would include the most-isolated areas, where there are no terrestrial fixed networks using cabling. In many rural areas that are slightly more dense, wireless ISPs already operate. And, of course, there are many parts of rural areas served by cable operators or telcos. 

A big issue is the presence of fixed wireless ISPs. According to Broadband Now, some 148.4 million U.S. residents are covered by fixed wireless ISPs. Assume an average household size of 2.5. That implies some 59 million rural locations already are reached by fixed wireless ISPs. 

834,331
17.0%
44 Fixed Wireless Providers
366,426
48.9%
21 Fixed Wireless Providers
40,764
74.8%
2 Fixed Wireless Providers
6,263,384
91.2%
69 Fixed Wireless Providers
1,608,108
53.3%
42 Fixed Wireless Providers
16,268,529
42.1%
136 Fixed Wireless Providers
4,759,559
89.3%
98 Fixed Wireless Providers
174,393
18.5%
4 Fixed Wireless Providers
43,004
6.9%
9 Fixed Wireless Providers
3,224,633
16.2%
46 Fixed Wireless Providers
1,177,132
11.5%
33 Fixed Wireless Providers
187,234
13.2%
9 Fixed Wireless Providers
1,567,481
93.8%
55 Fixed Wireless Providers
11,378,292
87.6%
159 Fixed Wireless Providers
5,825,665
87.7%
96 Fixed Wireless Providers
2,272,673
73.3%
115 Fixed Wireless Providers
2,709,060
92.7%
77 Fixed Wireless Providers
1,642,070
36.8%
57 Fixed Wireless Providers
1,264,577
27.5%
24 Fixed Wireless Providers
347,651
25.9%
16 Fixed Wireless Providers
1,489,981
25.0%
32 Fixed Wireless Providers
1,123,939
16.9%
30 Fixed Wireless Providers
4,355,976
44.3%
97 Fixed Wireless Providers
4,487,969
82.2%
83 Fixed Wireless Providers
1,029,983
34.2%
25 Fixed Wireless Providers
5,156,799
84.0%
102 Fixed Wireless Providers
770,579
75.2%
43 Fixed Wireless Providers
1,755,440
93.5%
60 Fixed Wireless Providers
2,878,685
97.9%
47 Fixed Wireless Providers
95,994
7.2%
15 Fixed Wireless Providers
32,158
0.4%
13 Fixed Wireless Providers
1,797,525
83.2%
50 Fixed Wireless Providers
5,645,759
28.9%
43 Fixed Wireless Providers
1,210,033
12.0%
36 Fixed Wireless Providers
330,862
47.7%
23 Fixed Wireless Providers
5,205,438
44.9%
99 Fixed Wireless Providers
2,624,729
67.6%
72 Fixed Wireless Providers
3,475,190
87.0%
84 Fixed Wireless Providers
1,652,257
12.8%
61 Fixed Wireless Providers
1,254,222
34.7%
13 Fixed Wireless Providers
484,007
9.9%
19 Fixed Wireless Providers
591,266
70.2%
27 Fixed Wireless Providers
1,411,141
21.4%
50 Fixed Wireless Providers
23,591,297
87.5%
239 Fixed Wireless Providers
2,924,461
98.0%
49 Fixed Wireless Providers
477,239
75.6%
15 Fixed Wireless Providers
59,868
57.6%
5 Fixed Wireless Providers
2,191,700
26.2%
49 Fixed Wireless Providers
3,200,222
45.2%
81 Fixed Wireless Providers
1,224,923
65.4%
18 Fixed Wireless Providers
3,405,642
58.6%
72 Fixed Wireless Providers
513,567
86.8%
36 Fixed Wireless Providers

It the WISP figures are close to correct, much of the rural internet access opportunity for satellite operators already is satisfied, as WISPs have taken most of the available market. 

The point is that the potential satellite market is sharply reduced by market share taken by competing WISPs. So there might be only two percent to three percent of rural locations that WISPs cannot reach. 

That would imply a potential satellite broadband market of 2.8 million to four million homes. If U.S. satellite internet providers already serve perhaps two million locations, the bad news for satellite broadband providers is that the market is approaching saturation, where every potential customer already buys. 

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