Only Some U.S. ISPs Have High Upside from 5G Fixed Wireless

Not every service provider is going to have an interest, or financial capability, to invest in fixed wireless to take market share from other firms that lead the consumer portion of the U.S. fixed network connectivity services market.

The biggest suppliers, by accounts, are Comcast, Charter and AT&T. The biggest footprints are held by AT&T, Comcast and Charter. That AT&T under-performs is a testament to the power of cable companies across AT&T’s markets.

source: Business Insider

Subscribers are a measure of existing market share, but not of potential, which is a matter of homes passed. At a high level, an argument can be made that, all other things being equal, the firms that can pick up market share include T-Mobile US and Sprint, with zero residential fixed networks, CenturyLink, with a small footprint nationally, and Verizon.

As a practical matter, CenturyLink is going to focus on its business segment, which generates 75 percent of total revenue. T-Mobile and Sprint might or might not make a push; while Verizon will aggressively pursue fixed wireless out of its fixed network territory.

Source: IP Carrier estimate

What has changed is the perception that if U.S. mobile operators must build a dense 5G small cell network in any case, they might as well explore the implications of using that network to support the 5G fixed wireless business as well. For Sprint and T-Mobile US, the new opportunity is virtually the entire United States. For Verizon the opportunity is perhaps 65 percent to 70 percent of the United States base of homes.

As a practical matter, the opportunities are more limited (capital is not available, markets are not dense enough, some markets are lead by entrenched leaders).

Value propositions will be key. Since Comcast already can sell gigabit service across all of its footprint, and Charter will relatively soon be able to do the same. So Verizon and other would-be attackers will have to look to markets where perhaps 20 percent of potential customers can be gained by a service that is not a gigabit, but fast enough, and affordable enough, to make sense.