How Will CBRS Market Develop?

Will new access capacity (Citizens Broadband Radio Service; use of unlicensed and shared spectrum) allow new entities to compete with mobile operators in the access services business? Some think so.
Rethink Technology, for example, has argued that shared spectrum will trigger new “challengers” to mobile operator revenue models.
Others might point to decades-ago arguments about Wi-Fi replacing mobile networks and conclude that new shared and unlicensed spectrum likely will create new use cases and marginally affect wide area network access providers.
But the development of Wi-Fi, if a valid indicator of what could happen, suggests complementary use cases more than substitution. source: Rethink Technology Research
Caroline Gabriel, director of research at Rethink Technology Research, believes that “enterprise small cells, particularly those operating in unlicensed spectrum, could be the undoing of mobile network operators, relegating them to ‘utility’ commoditization, and falling revenues…

U.S. Internet Access: What Would it Take for AT&T, Verizon to Take 10 Market Share Points?

The largest U.S. cable TV companies have 64 percent share of internet access accounts in the United States, according to the latest data from Leichtman Research Group. But there also is an 80/20 rule at work: the firms that drive most of the activity are Comcast and Charter; AT&T and Verizon.

Charter and Comcast have 81 percent of the cable internet customers. AT&T and Verizon have 67 percent of the telco internet access customers.

Between them, Charter and Comcast got 93 percent of the net account additions in the cable TV internet access provider segment. And while AT&T gained marginally, while Verizon lost marginally, nearly all the telco ISP losses came from CenturyLink and Frontier Communications.

In other words, though cable ISPs continue to get virtually all the net gains in accounts, AT&T and Verizon are roughly flat, in terms of subscriber installed base, while it is the rural operations that are losing share to cable rivals.

There might be some larger implica…

Video Entertainment: Slim to Zero Profits

For most tier-one service providers, video entertainment has lower profit margins than internet access or voice. The issue is how much lower. Gross margins for internet access might be in the range of 20 percent for video, 40 percent for internet access. Net margins for video might be in single digits.

For smaller service providers, video entertainment is a money-loser.

source: Geobrava
For Metronet, an overbuilder operating in Indiana and Illinois, it is literally the case that video entertainment is a “zero margin” service; a feature of a triple-play service, not a direct revenue driver.

Using what it calls a pass-thru pricing regime, Metronet says it makes video entertainment available at exactly what Metronet pays its content providers.

Under that “pass thru pricing” program, consumers are billed exactly what we pay for the television networks in your package,” Metronet says.

That means no mark-up from the actual cost of goods. “We promise that you'll pay exactly what we pay for…

What Will Drive 5G Business Model?

Among the many unknowns about 5G is the business model: where will new incremental revenue sources develop, and will they develop?
The conventional wisdom is that “enhanced” mobile broadband is one of three key revenue drivers. The others are ultra-low latency services (connected cars, for example) and massive machine applications (internet of things).
If that proves to be true, then it also is possible to say that two out of three expected revenue drivers will be enterprise markets (low latency and machine applications), while one will represent consumer mobile broadband.
And, at least at first, consumer internet access is likely to drive incremental revenue growth. The value proposition (10 times faster) is clear, and the market is large (everybody) and well understood (internet access).
And while consumer internet access will continue to be a “horizontal” value (everybody needs internet access), that might not be the case for the other two drivers. It is logical that success provid…

More 5G Spectrum Coming from U.S. FCC

The Federal Communications Commission will vote in November 2017 to make available 1,700 MHz of high-frequency spectrum for 5G.
Two spectrum bands will be allocated,  providing 700 MHz in the 24 GHz band and 1 GHz in the 47 GHz band.
A year ago, the FCC allocated 11.65 GHz of spectrum with 3.85 GHz of that allocated in the 28 GHz and 37 GHz to 40 GHz bands.  Additional spectrum is still under consideration to be allocated in the future.
All that new spectrum, plus spectrum sharing and spectrum aggregation, will lead to mobile internet access becoming very price-competitive with fixed internet access, for many users and use cases.
Some might still doubt that 5G will create, for the first time, full product substitution by mobile networks for fixed network internet access. Traditionally, the objections were well founded, and based on value and price objections.
Mobile traditionally has been much slower than fixed, and cost per bit has been at least an order of magnitude higher for mobile …

Why Gigabit Mobile Matters

Though retail pricing is an issue, mobile network peak data rates above the gigabit-per-second barrier are important because it brings “a mobile user experience that at least matches the home fixed broadband experience,” according to Nokia.

In other words, the value is not so much “gigabit speeds for smartphones,” but the ability of mobile networks to rival fixed network user experience. That, in turn, matters for several reasons.
In markets where mobile provides nearly all the internet access, gigabit peak rates mean typical user experiences in developing markets that are substantially on a par with developed markets.
In developed markets, gigabit mobile rates mean both the ability to create a full substitute product for fixed access, as well as the ability to serve many locations where the business case for a fixed solution at such speeds is unworkable.
For fixed service providers, gigabit mobility therefore also calls into question the value and business model fo…