By Jeff Kagan July 8, 2024
Collected at: https://www.rcrwireless.com/20240708/network-infrastructure/kagan-will-wireline-broadband-still-be-around-in-ten-years
Here is a question to ponder. Will traditional wireline broadband be extinct in ten years? In what seems like a massive blow to existing wireline broadband providers like the cable television and telephone companies, there is speculation that the industry is rapidly moving to wireless. Let’s take a closer look at this prediction.
First, this has happened before, in fact many times. So, let us take a closer look at what disruptive change is coming to this space by looking at recent history.
Industries always change as they move forward. Rather than add to what we already have, new technology seems to tear down yesterday as we build tomorrow. Remember we used to love the Apple iPod to listen to music before the iPhone.
FWA wireless broadband is lower cost compared to wireline broadband
This time the story is about FWA or Fixed Wireless Access. This is a new technology that lets wireless carriers create and market a wireless broadband service.
One benefit is price. It costs much less than traditional, wireline broadband service. That means it has as the economy is hurting the masses, FWA costs the customer significantly less, based on today’s pricing.
That should help propel acceptance of this new technology.
This could quite possibly put enough pressure on the wireline broadband service that it will fade away over time the same way the telephone and cable TV have been doing over the past 20 or so years.
History lesson how new technology changes the “growth curve”
First, let’s pull the camera back and take a longer-term historical perspective. It is important to understand history.
In fact, this same thing has already happened, time and time again. Examples include telephone, wireless, cable TV and more.
You see, until around the year 2000, the telephone and cable TV industries were rapidly growing. They were the industry leaders in their own sectors.
However, ever since that time, both traditional services have been in a rapid decline.
Telephone and cable TV companies face new competitive pressure
One example is landline telephone. Smaller telephone companies or RBOCs merged in the 1990s and today there are fewer, larger, national providers. In the late 1990s we bought second phone lines for data before broadband connections were offered.
Then broadband was created, so people gave up the second line. That was when these basic services crested on their growth curve and began to decline.
Wireless came next and along with the iPhone and Android smartphones; local phone and cable TV services has been declining.
iPhone and Android changed smartphone sector
Smartphones are next. Once upon a time Motorola was king of the hill with wireless handsets with the StarTac and Razr. They missed a change moment in the late 1990s when wireless moved from analog to digital, sending them to the bottom of the list of competitors.
Next, Motorola was replaced by Nokia, then Blackberry who led the next growth wave with smartphones for the next decade.
Next, the Apple iPhone and Google Android entered with their super-smartphones and rapidly transformed the space, virtually overnight.
Cable TV reached its peak around 2000 and has been declining since
Cable TV is yet another example. It grew, year after year for decades. It started with many, smaller cable television companies in different regions. The smaller cable television companies started to merge and today they are fewer and larger, national competitors like Comcast Xfinity, Charter Spectrum, Altice, Cox and more.
Cable TV grew until about twenty years ago when they too started to lose market share. Since that time the industry moved away from cable TV to wireless, broadband, streaming and more.
In fact, today’s loss in the cable television industry has most competitors with less than 50% market share. In fact, many smaller providers have less than 10% market share. That is causing an increasing number of cable TV providers to exit the space altogether to focus on broadband and wireless.
Telephone and cable TV being replaced by wireless and streaming
Today, as traditional telephone and cable TV services continue to lose market share, they are being replaced by other and newer technology like wireless and streaming television.
Suddenly, new versions of technology are entering the scene like private wireless and wireless broadband.
All these examples show how cable TV, telephone, wireless phones and services have gone through wave after wave of change and transformation, and that change wave only continues to move forward and accelerate.
FWA wireless broadband competes with wireline broadband
Broadband is the next industry in the crosshairs. The same change wave which reinvented industry after industry is starting to do the same thing in the broadband industry.
FWA powers wireless broadband. Suddenly, wireless carriers are offering a lower cost wireless broadband service and competing directly with higher cost traditional wireline broadband services.
How will existing cable TV and telephone company’s wireline broadband services answer this next question?
Weak economy is fueling growth of less expensive broadband options
Remember, the weak economy has vast numbers of users looking for ways to save money. It looks like wireless broadband is one way to do that.
Verizon Wireless, T-Mobile and AT&T Mobility can use this new technology to compete for wireless broadband against cable TV providers like Comcast, Spectrum, Altice, Cox and others.
In response, Comcast Xfinity has just announced they will make a wireless broadband service available to their customers. This offer will change over time. This will be is a step other cable TV companies will likely take as the competitive threat grows.
Why every competitor needs to cannibalize their own business
It’s a case of cannibalism. Throughout time, we have seen old technologies give way to new ones, over and over again. That will only continue as we move forward.
That’s why I think wireless broadband will indeed be another change agent. It will empower new competitors with wireless broadband and lower costs.
This will put downward pricing pressure on the entire broadband sector. Even among wireline broadband providers like cable TV and telephone companies.
Every wire line competitor today needs to embrace new wireless technology, while they still can.
FWA wireless broadband has potential to reinvent broadband space
I believe FWA has the potential to reinvent and reprice the entire broadband industry. Customers don’t need multiple service providers.
This new competition from new technology and new competitors means there will very likely be a significant repricing move in the broadband sector.
As I have laid out above, we have seen this same story with many other competitors in many other industries. That being said, new technology like FWA will continue to grow and will impact the broadband sector.
In my opinion, the choices made by wireline competitors right now will either save them or doom them in the broadband space of tomorrow.
The challenge going forward is every competitor must adopt and embrace new technology. They must cannibalize themselves and their offerings or they risk fading away.
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