There may be hope for mobile-only operators after all

by Jeff Wiener on April 29, 2016

mobile-telecommunications1For awhile now we’ve been talking about the necessity for traditional telecom operators to begin to transition away from simply providing the wireless infrastructure that content providers can get rich off of, towards discovering what makes them unique in an increasingly competitive digital space and finding ways to monetize that uniqueness. But while much of this discussion has revolved around the next generation of wired connection, exploring the need for telcos to diversify services and products and the hopelessness of sticking to traditional telecom territory, there may be a compelling case for the survival, maybe even growth, of mobile-only operators after all.

In fact, new figures come out this year from the U.S. Census Bureau indicate that the mobile segment is growing, as more and more people forego wired broadband Internet connection in favour of going exclusively wireless. This means, of course, more growth potential for LTE networks, and subsequently more money to be made for wireless providers.

Simply put, while telecom operators look for ways to evolve beyond simply being the “dumb pipe” for wireless connectivity, the numbers show that more and more people are relying exclusively on wireless connectivity to meet the needs of their digital existence, and it would behove the shrewd operator to recognize that maybe there’s still some life in the old wireless market yet.

According to recent data from the U.S. Census Bureau, which surveyed 53,000 households in July 2015, sought to discover Internet and device adoption had changed over the previous two years since the last poll. The 2015 study found that one in five “connected” households relied exclusively on mobile services at home, compared to one in 10 in 2013. Lower income families are far more likely to go mobile-only (29%) compared to higher income households (15%); however the percentage of mobile-only households grew across both demographics.

Now the reasons aren’t hard to find, for comparatively speaking, U.S. fixed and mobile broadband rates are among the highest in the world. Given the necessity of having wireless connectivity, people are increasingly having to choose between the two options (rather than paying for both options), and given that wireless is more versatile, most are opting for that.

Beyond that, given that the speed gap between wired and wireless has closed of late and the fact that LTE is practically ubiquitous, many are finding the speed difference negligible, and certainly not worth the extra cost.

All that to say, as we envision a future of telecom where operators deploy their ultra-fast wire-line resources to usher in the next evolution of digital products and services, chasing digital revenues wherever they might lead, there remains significant reason to think that traditional wireless operators, companies perhaps without the wire-line resources of their larger competitors, will continue to thrive, content with simply providing the wireless infrastructure that more and more people are coming to rely on as their sole gateway to the digital world.

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