The economics of the telecommunications business has turned on its head in the past five years by broadband industry trends. One of the most profound changes is what traditional telecom companies consider to be their major growth driver.
The market for wireless services, traditionally the industry's focal point, has become stagnant. Meanwhile, the broadband market is growing more than 14 times faster than cellular services. Telecom companies are now looking at broadband as their primary growth driver for the foreseeable future.
“Right now, our company is at a pivotal crossroads,” T-Mobile US Chief Executive Mike Sievert said recently. “What it takes to attract and retain customers is materially more expensive than it was just a few quarters ago.”1
What Telecom Industry Trends Are Having the Greatest Impact?
Fixed Wireless Access (FWA) technology on 5G networks has enabled increased competition from wireless companies offering lower-priced broadband as part of cellular service bundles. And that has effectively saturated the market. Cellular offerings are undifferentiated, and consumer acquisition is mainly on price and contract, in effect making cellular offerings almost free.
As a result, virtually every cellular provider has jumped into the broadband market, offering FWA on 5G cellular networks. Broadband industry trends show dramatically increased broadband market competition as a result of bringing entirely new players into the ecosystem.
Compounding the issue, FWA adoption has skyrocketed, making it one of the most significant threats to incumbent broadband providers. These providers are responding by incorporating FWA into their cellular services.
Competition is growing within the core broadband provider ecosystem as well. Currently, the top five cable providers, including Spectrum and Comcast, hold a vast majority of market share. However, this landscape is likely to shift as private equity firms invest billions in expanding broadband fiber-optic networks to support their portfolios. Companies like Metronet and Frontier, once considered lower-ranked broadband providers, now pose a substantial threat.
“The presence of infrastructure private-equity capital has been transformational,” said Katrina Niehaus, a managing director at Goldman Sachs, one of the top banks arranging the fiber bond sales. “It’s not just broadband. It’s data centers, it’s cell towers, it’s satellites.”2
Equally importantly, these infrastructure investments are mainly occurring in areas that have had little to no broadband traditionally. “Fiber-optic network companies owned by private-equity firms are using asset-backed bonds to expand in areas where high-speed internet connections are spotty,” according to the Wall Street Journal.3
These promise to bring up to 50 million new subscribers, in turn making traditional broadband providers greatly interested in a consumer-constrained world.
What Do These Telecom Trends Mean for the Industry?
The issue isn’t quality. Simply getting better at what you do isn’t enough.
“It is clear that doing everything we are doing and just doing it faster is not enough to deliver on these changing customer expectations going forward,” T-Mobile’s Sievert said in a memo.4
That means telecoms will have to evolve to survive, much less thrive, due to broadband industry trends.
“We have reached the end of one chapter as we begin the next. Wireless may have reached the limit of traditional growth. Now, growth will come from new areas,” says Jeff Kagan of RCR Wireless News.5
How Can These Telecom Industry Trends Be Mitigated?
First, telecoms must get to know today’s customers at a granular level. Discover exactly what they want and when and how they want it delivered so you can provide solutions that are sure to sell and priced right. You have no margin of error.
Next, leverage up-to-the-minute market analytics to see beyond your own customers and scout the competition. Analytics that look into actual cellular and broadband usage is more accurate and puts a spotlight on your blind spots.
Additionally, distinguish between (and prepare appropriate strategies to address) two distinct lines of the broadband business – residential and business. Business broadband is a significant growth area for telecoms, while residential broadband is less so.6
Then, embrace broadband industry trends and turn the tables on broadband service providers. With 5G, telecoms can enter the broadband space previously reserved exclusively for fiber-optic cable providers. Beat them at their own game and bring in new customers.
Cutting-Edge Solutions Enable Telecom Evolution
The latest data-driven tools are helping telecoms better see the changing market to best align their customer acquisition and retention efforts to how things are today.
For instance, Mobilewalla’s Market Flow is a granular, population-scale measurement solution to understand broadband industry trends such as market and flow share. With Market Flow, you get:
- Granular data that provides insight at both the product (FWA, Fixed Broadband, a.k.a. FBB, etc.) and the geographic (state, city, census block, household, or business) levels.
- The ability to distinguish different broadband connection subtypes (such as FWA, FBB, etc.)
- Granular tracking of account mobility
- Separate tracking for both residential and commercial subscriptions
- Direct addressability to support activation
Find out for yourself: request a Market Flow data sample or schedule a consultation with one of our data enrichment experts.
1Will Feuer, “T-Mobile US To Lay Off 5,000 Employees,” The Wall Street Journal, 24 Aug. 2023, https://www.wsj.com/business/telecom/t-mobile-us-to-lay-off-7-of-workforce-df368047?st=c5d0ud0jg5018ig&reflink=desktopwebshare_permalink
2Matt Wirz, “Private Equity Borrows Billions to Bring You Broadband Internet,” The Wall Street Journal, 29 Aug. 2023, https://www.wsj.com/finance/investing/private-equity-borrows-billions-to-bring-you-broadband-internet-2d75c1ae?st=pdloa0mrf8lcrol&reflink=desktopwebshare_permalink
3Matt Wirz, “Private Equity Borrows Billions to Bring You Broadband Internet,” The Wall Street Journal, 29 Aug. 2023, https://www.wsj.com/finance/investing/private-equity-borrows-billions-to-bring-you-broadband-internet-2d75c1ae?st=pdloa0mrf8lcrol&reflink=desktopwebshare_permalink
4Will Feuer, “T-Mobile US To Lay Off 5,000 Employees,” The Wall Street Journal, 24 Aug. 2023, https://www.wsj.com/business/telecom/t-mobile-us-to-lay-off-7-of-workforce-df368047?st=c5d0ud0jg5018ig&reflink=desktopwebshare_permalink
5Jeff Kagan, “Is cutting 5,000 jobs the start of T-Mobile US slowdown?” RCR Wireless News, 5 Sept. 2023, https://www.rcrwireless.com/20230905/workforce/kagan-is-cutting-5000-jobs-the-start-of-t-mobile-us-slowdown
6Will Feuer, “T-Mobile US To Lay Off 5,000 Employees,” The Wall Street Journal, 24 Aug. 2023, https://www.wsj.com/business/telecom/t-mobile-us-to-lay-off-7-of-workforce-df368047?st=c5d0ud0jg5018ig&reflink=desktopwebshare_permalink
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