In Business Model, Internet Access, Mobile, Spectrum

Every service provider’s 5G strategy is going to be shaped by its own perception of opportunities.  Verizon, for example, has the smallest fixed network footprint among tier-one internet access suppliers in the U.S. market.

Comcast passes (can actually sell service) about 54 million homes. Charter Communications passes some 50 million home locations. AT&T’s fixed network passes perhaps 62 million U.S. homes. Verizon, on the other hand, passes perhaps 27 million locations.

What that means is that Verizon has a clear interest in using 5G fixed wireless to expand its addressable market by more than 35 million U.S. homes that it cannot reach today. And that attack will be based on use of 5G millimeter spectrum.

Even if 5G does not immediately lead to huge new revenue streams and new internet of things and ultra-low latency use cases, it is likely to enable a key near-term Verizon strategy, namely growth by taking market share now held by competitors in fixed network internet access markets.

So when examining various service provider strategies for 5G, it matters what strategic advantages or disadvantages any particular provider possesses. Verizon can well expect to take market share out of region, using its 5G fixed wireless platform.

While that might not address other long-term issues, taking market share is a proven way for attackers to boost growth and revenues in the near term. That is precisely what cable TV operators did in voice, are starting to do in mobile services what some telcos now are doing in video (both access and content).

Long term, gaining additional market share in internet access does not address what Verizon and other service providers must do to replace shrinking revenues in their legacy connectivity and linear video subscription businesses.

Nor does that same strategy make as much sense for Verizon’s other fixed network competitors. Comcast is focused on international growth; AT&T on content and other “up the stack” opportunities, with some international growth; Charter Communications has to upgrade its access networks and figure out what to do about “up the stack” content or other growth strategies.

Sprint and T-Mobile US do not have the resources or will to do much more than try and gain share in the core mobile business, for the time being. CenturyLink already has made a huge transformation into an enterprise services company with a big legacy consumer telecom business.

The point is that there is no single, universal strategy for 5G. Each company will move ahead based on its perception of other elements of its growth strategy.

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