Do International Rankings of Internet or Mobile Access Speed Mean Very Much?

The United States never ranks at the top of countries for mobile internet access speeds. It never ranks at the top for fixed network internet access either. The United States never ranked at the very top for voice service adoption, either. Some would say such rankings do not matter.

The whole point of having communications capabilities generally is to support social, economic and other goods that we believe come with good communications. Deficiencies such as “lack of coverage” or service quality (audio quality, internet access speed) are therefore problematic since those conditions might hinder desired social and economic outcomes.

The rankings, per se, do not matter much. What matters is the ability to wring value from such capabilities. And while there is a generalized correlation between mobile internet access speed and measures of economic strength, the correlations are not necessarily causal. 

source: MGM Research

Whatever combination of factors “causes” economic well-being, it is impossible to say what percentage of economic health is produced by any single input element. Few would likely question the assertion that the U.S. economy is large and robust, despite never ranking at the top of measures of communications supply. 

Nor, some might well argue, can ranking at the top of measures of internet access speed propel most economies much further than they can, based on all the other background factors (population size, for example).

Fixed Networks are the Mainstay, but Mobile-Only Households are Growing

A rational observer would have to agree that fixed network internet access will remain the mainstay for most consumers. Still, in 2017, about 19 percent of U.S. homes were mobile-only for internet access, so there are a significant number of use cases where mobile data is deemed a reasonable choice. In 2019, 20 percent of U.S. homes are mobile only. 

source: Pew Research Center

High Altitude Pseudo Satellite (Drone) for 5G

Lanai to See Test of Solar-Powered Drone for 5G Service

A solar-powered unmanned aerial vehicle developed by SoftBank and built by U.S. drone manufacturer AeroVironment will test 5G delivery over the island of Lanai, Hawaii. The Hawk 30 High-Altitude Pseudo-Satellite drone is in the same family of aircraft developed by NASA. 

The University of Hawaii Research Organization has a support agreement with program sponsor HAPSMobile Inc. to perform the test project on Lanai. SoftBank Corp., Loon LLC and AeroVironment also are involved in the project.

source: NASA

Service Providers Believe Enterprise Will Generate Most New 5G Revenue

With the caveat that service provider executives can be collectively wrong at times, there is fairly broad concurrence that new revenue sources in the 5G era will come from enterprise use cases, according to GSMA. 

source: Cisco

How Do You Build a Communications Network at Population Density of 6 People Per Square Mile?

As rural areas have the lowest population density, and since communications network costs are density related, American Indian reservations are tough places to finance communication networks. By some estimates, the most-difficult places to connect are homes in the last two percent of locations, representing the most-isolated areas. 

The average population density for the U.S. is approximately 345 persons per square mile. The Navajo Nation has a population density of 6.33 persons per square mile. That means the business model is not only astoundingly difficult, it likely can be characterized as non-existent. In other words, service can only be provided if subsidies are provided, since there actually is no positive business case. 

Assume 55 locations per square mile, and two fixed network suppliers in each area. That means a theoretical maximum of 27 customers per square mile, if buying is at 100 percent. Assume for the moment that buying rates really are at 100 percent. Two equally skilled competitors might expect to split the market, so each provider, theoretically, gets 27 accounts per square mile.

At average revenue of perhaps $75 a month, that means total revenue of about $2025 a month, per square mile, or $24,300 per year, for all the customers in a square mile.

The network reaching all homes in that square mile might cost an average of $23,500 per home, or about $1.3 million.

At 50 percent adoption, that works out to roughly $47,000 per account in a square mile, against revenue of $900 per account, per year. Over 10 years, revenue per account amounts to $9,000.

The business case does not exist, without subsidies. The business case is, of course, far worse at densities of 6.33 persons per square mile. As one engineering analysis noted, “areas with a density density of less than 10 households per square mile (survey areas C, D, and F) are unlikely to see investment from the private sector.”

In rural areas everywhere, there are two fundamental reasons mobile networks have a better business case than fixed networks: customers want service and network costs are lower than for fixed networks.

CEO of Genexis on FTTH in United Kingdom

Gerlas van den Hoven, CEO of Genexis on full fiber connectivity in the United Kingdom. As an industry mentor once told me, a few decades ago, "fiber to the home is the future, and always will be." He was joking, but only in a sense. Since then, in the U.S. market, hybrid fiber coax has become the market leader for fixed network internet access, with service almost ubiquitously at 1 Gbps, and a roadmap to 10 Gbps. Other options keep popping up, and some might eventually become commercial forces.

In some markets, FTTH provided by a single wholesale provider might be the future. The issue is, when does it stop being the future, in the sense of finally being deployed as commonly as copper was. And, if the access market remains competitive, what is the financial return?

"Fiber to where you can make money" is my own formulation, when markets are seriously competitive.