Have We Seen "Peak Telecom?"

Most would likely agree the global telecom business exists in a state of high tension, as its business model faces major disruption. To be sure, there are other issues: seemingly-ever-growing network platform costs; competition; lower revenue per account; saturated markets; changing customer demand and a shift of value away from “access” and to “apps, content and other over-the-top services.”

Other shifts also are clear. Where fixed networks once defined the industry, now mobility leads, and we arguably have passed the era of fixed network dominance. Not only are most connections now mobile, rather than fixed, not since 2007 have there been more fixed internet access connections than there were mobile accounts.

Fixed voice connections have been falling since about 2006, globally, and reached a peak in the U.S. market about 2000. Product maturity also is seen in developed market mobile subscriptions, text messaging, linear video and even fixed network internet access.

source: ITU

In the coming 5G era, we might see a further shift, away from services sold to humans, and towards services sold to non-human users; towards enterprise-lead sales growth, and away from consumer-lead growth.

A growing number now believe we are essentially past “peak telecom.” In other words, looking at the industry through the lens of a product life cycle, perhaps total industry revenue has past its peak, and is headed for sustained decline.

Look only at fixed internet access in the United States. You might well argue that the era of fixed internet access has past its peak.

“Pew Research Center recently found that home broadband adoption appears to have plateaued,” said Joan Marsh, AT&T SVP. Though 67 percent of U.S. residents use a fixed internet access connection at  home, that is down from 70 percent in 2013, “a small but statistically significant difference,” said Marsh.

The point is that the notion of “peak telecom” is not silly or irrelevant. Clearly, product segments come and go. The bigger issue is whether the network access role also is past its peak, or will soon be.