For mobile operators in Australia and elsewhere, “bypass is the ultimate prize,” allowing mobile operators to take market share away from fixed network operators. And mobile substitution for the fixed network might take on huge proportions in Australia, analysts at S&P Global argue.
Australia's National Broadband Network might be reshaping the competitive landscape in unexpected ways. Designed in large part to eliminate differences between service levels in rural and urban areas, as well as to break the Telstra dominance of fixed network services, the NBN arguably is succeeding. Many observers are less sure about the business model, as high wholesale costs might be retarding adoption.
On the other hand, that presents an opportunity for mobile operators not reliant on the NBN and its “high access charges, opaque service offerings, and inferior technology mix,” an analysis by S&P Global argues. In other words, the business advantage of mobile substitution is helped by NBN challenges.
Among those challenges are “a retrograde technology mix, political involvement, rollout miscalculations, cross-subsidization of unprofitable regions, as well as a convoluted pricing structure that puts the onus on RSPs to adequately provision bandwidth,” says S&P Global. “It is a contrived market shaped by heavy government intervention” and “the economics of reselling NBN broadband services are extremely challenging.”
Almost ironically, then, mobile substitution will be that much more prevalent. “Australia will likely be a global leader in mobile broadband adoption,” as a result, S&P says.
In part, that is because the design of all networks is converging: the idea being to get access traffic moved as quickly as possible to the optical backbone.
“Taken to its logical conclusion, fixed and mobile networks might only be distinguishable by the "last 100 meters," S&P argues. “Both will require fiber deep into the network.
In fact, assuming a small cell network has access to lots of unlicensed spectrum and millimeter wave assets, the actual architecture resembles a fixed network access architecture: fiber close to the customer and then final connection using some non-fiber means.
Even fiber-to-home networks convert signals from optical to electrical, with actual delivery using copper media (to a Wi-Fi router, perhaps), with direct links using wireless.
Fiber-to-curb and hybrid fiber coax networks are more directly analogous, terminating the optical network someplace close to the end user, and then using some other media (copper cabling, copper wire, fixed wireless or mobile access) for final delivery.
So as small cell networks are deployed, using either fixed wireless or mobile access, they will resemble HFC and FTTH very closely.
In all cases, the design objective is to get traffic off the access network (wired or wireless) and onto the optical backbone as quickly as possible.
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