How much market share does 5G fixed wireless have to gain to be meaningful? For some new potential suppliers, even a few percentage points of market share could be significant. A million accounts represents about one percent of the total U.S. fixed network internet access market.
For a new provider, that could represent incremental recurring revenue of perhaps $720 to $960 in annual account revenue, assuming monthly recurring revenue of either $60 a month to $80 a month.
At just one percent market share, that represents $720 million to $960 million in recurring annual revenue. If the functional definition of the minimum revenue opportunity large enough to be considered by a tier-one service provider is $1 billion, then 5G fixed wireless fits the bill.
If any single internet service provider is able to get five percent market share, that represents about $5 billion in incremental recurring annual gross revenue. For a firm such as AT&T, with debt service payments about $6.8 billion (though set to decline), that is an important revenue contribution.
Another answer might be that, in the U.S. market, 5G fixed wireless will be meaningful for fixed network ISPs if it brings the rate of cable TV net additions close to zero. For cable, that would choke off the most-important driver of subscription revenue. For telcos, that also could mean a halt to share losses in the internet access category that have been on-going for at least a decade.
Consider that in any particular quarter, cable tends to gain about half a percent market share, or about 532,000 net accounts. With internet access now driving subscription revenue growth, that matters.
If all suppliers of 5G fixed wireless collectively manage to gain 532,000 accounts per quarter, or about 2.1 million net accounts a year, cable’s subscriber business grinds to a halt, all other things being equal.
Some predict 5G fixed wireless accounts could, over the next four years, garner about 4.5 million accounts. That would not cause cable gains to go to zero, but would cut internet access gains--all other things being equal--in about half.
Though many doubt fixed wireless can reach 15 percent to 20 percent share of the U.S. fixed network internet access market, that implies gains of between 15 million and 20 million accounts.
Some of us might argue that 5G fixed wireless would be significant for the market at even 10 percent share gains, as that could represent a key reversal of market share trends of some years standing, between cable and telcos. Gains might also be important for some other providers not presently in the fixed network internet access business.
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