Thursday, August 1, 2019

Cable Says Fixed Wireless Not a Threat. Really?

With the proviso that a great divergence of opinion exists on the ultimate market share fixed wireless services might get, it does at least make sense to consider what could be possible. Assuming the T-Mobile US merger with Sprint is approved, one of the likely conditions is that new T-Mobile works to gain roughly 10 million new U.S. fixed wireless accounts in rural areas.


Verizon at the moment believes it will eventually gain some eight million fixed wireless accounts, eventually. Throw in some hundreds to thousands of new fixed wireless accounts by independent ISPs and maybe a million AT&T accounts and one could conceivably imagine 20 million U.S. “fixed” internet connections. 

By some estimates, there are a total of about 97 million U.S. internet access connections supplied by fixed networks (not including mobile internet access connections to phones and other devices). Other estimates suggest there could be 110 million accounts in service. 

No all units are occupied. Vacancy rates can range from more than one percent for owned housing and up to seven percent for rental units. Some “homes” are not used all year. 

U.S. housing locations number somewhere between 129 million and perhaps 135 million

If so, fixed wireless might eventually represent 15 percent to 20 percent of active subscriptions supplied by fixed network ISPs. 

Fixed wireless would represent a smaller proportion of “homes,” as not all homes buy fixed network internet access, not all homes are occupied (and therefore candidates to buy) and some homes cannot easily be wired (they are boats, mobile vehicles or can be rooms inside other homes). 

How that changes market share statistics would depend on how many subscriptions replace existing accounts, and what percentage represent incremental new accounts. But it is reasonable to suggest that most of the changes represent market share shifts, not incremental growth, as the U.S. market is nearly saturated. 

Most people who want to use the internet already do so. And most people that want to buy fixed network internet access already do so, as well. In the future, mobile substitution also will continue to limit the size of the market for fixed network internet access, as mobile access will become more attractive for some customers. 

Behaviorally, it already is correct to note that mobile access to the internet is a growing portion of total internet access. That especially is true for lower-income households



No comments:

Many Winners and Losers from Generative AI

Perhaps there is no contradiction between low historical total factor annual productivity gains and high expected generative artificial inte...