Mobile Experts released a well-timed report this week addressing fixed-mobile convergence and the escalating competition trend in the U.S. broadband market.
This new report takes a hard look at mobile's fixed broadband entry using 5G mmWave and cable's wireless entry using MVNO to see how their cost-per-GB unit economics compare. The potential financial outcomes for both cable and mobile operators, and the competitive outlook, is included, and it looks like each holds comparative economic advantage in core markets.
In addition to its analysis of cost per GB, this report also calculates the cost of covering each square kilometer for various demographic scenarios. Mobile technologies can effectively compete for Fixed Wireless Access in some areas, and cable strategies can effectively compete in other regions. This high-quality analysis considers both capacity and coverage, to illustrate the overall picture for nationwide networks.
"As technologies progress, so does the market ecosystem," commented Principal Analyst Kyung Mun. "Consumer behavior and various advancements are beginning to blur previously independent verticals. Mobile operators have traditionally focused on wireless services, and cable operators have the lion's share of the fixed broadband market, but as players in traditional service look to grow by horizontal and vertical mergers there is growing speculation that fixed and mobile operators may be eyeing one another's turf for growth. In this new report, we take a good look at the threats and opportunities that 5G may pose in this slowly-brewing fixed-mobile convergence in the U.S. telecommunications industry."
Mobile operators must continue to invest in network infrastructure and spectrum to generate the necessary network capacity to meet growing mobile demand. The Mobile Experts report includes detailed breakouts and models of financial outcomes, as well as nitty-gritty details about network expansions through macro and small cell infrastructure across low/mid/high spectrum bands.
"5G fixed wireless service is a means to provide a home broadband alternative to cable operators' fixed broadband offerings. At the same time, the cable operators' MVNO deals to enter the mobile wireless market are a potential threat to the mobile operators' stronghold. Will these new entrant strategies be disruptive enough to significantly impact their incumbent statuses in their core markets? Will 5G be an inflection point for wide-scale disruptive technology in the fixed-mobile convergence and competition? We believe that all of these operators make very rational decisions based on Return on Investment, so we've invested the past three years in creating this highly sophisticated financial model," commented Principal Analyst Kyung Mun.