More Competition Coming in Internet Access Business

Competition in telecommunication markets in South Asia, Southeast Asia and elsewhere--already robust--is growing.

Strategically, providers of Internet access, especially mobile service providers and satellite Internet providers, are going to be challenged by the launch of two brand new satellite Internet service constellations.

Interest in TV white spaces initiatives are growing. In addition to TV white spaces, shared spectrum is likely to add even more capacity in many markets.

Google Fiber is expanding to four new metropolitan areas of the United States. On top of that that, it now is believed Google will enter the U.S. mobile business as well.

So it might not come as a shock that a new survey suggests telecommunications service providers might lose half their customers in one year.

The survey of 15,000 consumers and 2,700 enterprises in 15 major global markets by Ovum found that only about half of surveyed customers definitely had no plans to leave their current suppliers.

About 25 percent of all users globally say they will definitely change providers within 12 months, while 25 percent reported they might do so.

Those findings are not necessarily unusual, even if, in markets where the triple play offer is standard, customer churn rates are far lower, on the order of 12 percent to perhaps 15 percent annually. That tends to be true, in the U.S. market, for example, for the largest service providers, including AT&T, Verizon and Comcast.

Churn rates for smaller service providers still are in the 24 percent to perhaps 36 percent range.

Two decades ago, churn rates for constituent triple play services--even at the biggest companies--could range as high as 36 percent annually.

Buckle up: competition in the Internet access business is getting tougher.