The shift from scarcity to abundance--with all that could imply--is coming to the global communications business. Where end user capacity has often been expensive, it is going to get cheaper; where limited, capacious; where supplier access has been limited, it will become widespread.
As you can well imagine, that shift from scarcity to abundance will cause business model upheaval. To the extent that business models are built on “moats” caused by resource scarcity, abundance will weaken or eliminate such moats.
New competitors will be enabled. The prop that spectrum scarcity arguably provides for profit margins--and keeping competitors away--will fall. Not only will it be possible for new suppliers to enter the market, but access might well shift in a historic way from fixed to mobile or wireless modes.
That might shift the business value of most fixed networks to mobile backhaul, in a major sense. At the same time, the cost structure of the fixed network will become a bigger issue, as more of the value is created at a wholesale level, not retail. That means potentially-less retail revenue.
And sustainable wholesale business models necessarily require operation at lower costs than retail networks.
Better technology is part of the supply push. But so is radically new spectrum quantity; new network architectures and new ways of authorizing spectrum use.
Consider just one of those trends, the ability to aggregate licensed and unlicensed spectrum.
“Operators don’t have enough licensed spectrum to get to gigabit,” said Qualcomm Technologies Senior Director of Marketing Peter Carson. Those comments come in the context of 4G networks.
Using license assisted access, which aggregates licensed mobile and unlicensed Wi-Fi spectrum, “literally 90 percent of all operators in the world can get to gigabit LTE.
“This is the great equalizer,” he said. Of course, as we move forward to 5G, in many markets there will be even more unlicensed spectrum available, as well as network protocols that will allow creation of private LTE networks, especially for venues and campuses.
Precisely how much all that changes present retail markets for mobility services is unclear. In some senses, private 4G networks (or 5G networks, eventually) simply become new forms of venue access, as we have seen with Wi-Fi.
But we might see new premises access providers that supply indoor or venue access on a wholesale basis (neutral host providers). As has been the case with Wi-Fi, we might also see use of LAA and other approaches (shared spectrum) as a tool for supplying access bandwidth at lower cost than relying exclusively on the licensed assets.
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