In Business Model, Internet Access, Mobile

“Mobile substitution” for voice has been a global trend since the advent of 2G networks. In fact, mobile is the only sort of ubiquitous network in most parts of the world. But that now might become an issue for internet access as well.

“I will say over time three to five year time horizon unequivocally 5G will serve as a broadband, a fixed broadband replacement product,” says AT&T CEO Randall Stephenson. “I am very convinced that that will be the case.”

“You know, we back in the 90s everybody was saying wireless would never serve as a substitute for fixed line voice because there wasn’t sufficient capacity,” Stephenson said. “Well it is a substitute for voice.”

Right now, AT&T says it has 11 million fiber to home locations and eight million business locations. AT&T also expects to reach 14 million consumer fiber-to-home locations soon. It probably is worth noting that AT&T’s fixed network passes–is able to sell services to–as many as 62 million U.S. homes.

In other words, AT&T might soon pass 22.5 percent of its consumer locations with optical fiber drops.

Even without quantifying the matter, if AT&T has managed to build optical fiber to less than a quarter of its U.S. homes, and also believes 5G will provide a workable substitute within three to five years, it is hard to see the logic of continuing to build consumer optical fiber connections, at a time when consumer fixed line accounts are shrinking overall.

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