Have U.S. Telcos "Permanently Lost" the Internet Access Battle?

U.S. telcos now have permanently lost the battle for internet access market share to U.S. cable operators, analysts at Jefferies now say. “In our view, it is far too late for the ILECs to ramp spend to compete.”
The key exceptions, though, are AT&T and Verizon, which will be able to offer 5G access, both mobile and fixed, at speeds that will rival what cable operators can offer.
Still, unless something breaks the current trend, telcos collectively could become something of an afterthought in the access business, with market share as low as 28 percent by 2020, according to New Street Research.
That forecast, though, likely assumes 5G will not be an important factor for AT&T and Verizon, an assumption some of us do not share.
AT&T and Verizon represent 66 percent of all U.S. telco fixed network internet access accounts, while most of the fixed network telco accounts losses in the second quarter of 2017 came from the three former rural telcos CenturyLink, Windstream and Fronti…

When Apple, Comcast, Facebook All are Key Content Distributors, Something Important Has Changed

One hallmark of market disruption caused by technology revolution, especially when accompanied by deregulation, is that new competitors enter older markets. Often, the most-disruptive new entrants are those from outside the traditional industry boundaries.
Consider that, in new discussions about releasing new movies to the streaming window faster than ever, primary distributors include Comcast and Apple. Such a new “premium movie download” product would allow viewers to watch streamed movie content just weeks after theatrical release.
Obviously, what is important about that pairing of names is that a major device manufacturer and one of the largest linear video distributors are linked. We are used to thinking of cable TV companies, TV and radio broadcasters as “content distributors.”
We are less used to device suppliers occupying that role, any less than we have been used to asset-light firms such as Netflix, Hulu or Amazon being “content distributors” as well.
That same sort of porous…

No Need for 5G?

At least some observers might have argued that “we do not need 3G.” Some might have argued there “is no need for 4G.” So it is not surprising that some argue there is no need for 5G, either.
One argument might be that data growth actually is not as robust as many believe it is. Video is the reason most-often given for why capacity is needed. But some might point out that video already represents more than 50 percent of total mobile network. Some might argue that future growth, though substantial, is a glass half filled. In other words, there will be significant growth, but not orders of magnitude growth.
Many of the new use cases likewise will be satisfied by existing fixed network assets.
Others might argue that, although 5G will enable many internet of things apps, 5G will not be needed for many such apps and use cases.
The point, some might argue, is that the commercial revenue drivers for 5G are not entirely clear. So argues William Webb, Ofcom senior technologist, for example.

Where Cable ISPs Compete, They Win?

The U.S. internet access market is one of the few in the world where cable TV operators have been driving consumer internet access speed advances over the last decade. The United Kingdom is another such market.
In 2016, for example, on U.S. fixed networks, “average” speed increased 40 percent in a single year, and most of that was driven by Comcast and other cable TV operators.
In the United Kingdom, in 2016, Virgin Media, the U.K. cable operator, was far and away the fastest ISP, offering speeds more than twice as fast as BT or BT’s wholesale customers and about four times faster than ISPs using unbundled local loop access.
source: Ookla
source: Ookla
But speed is not the only significant business model impact in the U.S. and U.K. markets. At least as important--and arguably more important-- is the dramatic change in potential market shares obtainable by any former telco in such a market.
Facing accomplished competitors with scale, skill and other business resources, including their ow…

Absent a Disruption, U.S. Telcos Will See Internet Access Share Between 28% and 45%

How well can any telco do, in terms of internet access market share, when facing accomplished competitors with scale, skill and other business resources, including their own facilities?
Verizon’s experience with its FiOS service suggests the answer is “40 percent to 45 percent of the market,” even when fiber to the home is the access platform.  
"At the end of the second quarter of 2017, cable had a 64 percent market share versus 36 percent for telcos,” said Bruce Leichtman, Leichtman Research Group president and principal analyst.
Unless something breaks the current trend, telos could collectively become something of an afterthought in the access business, with market share as low as 28 percent by 2020, according to New Street Research. source: New Street Research
Stranding 60 percent of the deployed capital in FTTH access networks is one very good reason for some service providers to look at 5G fixed wireless. If the maximum share is range bound around 40 percent to 50 percent, t…