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Global Penetration of Wired vs. Wireless Voice

The most recent Dallas Federal Reserve Annual report contains a compilation of statistics used to illustrate the impact technology is having on global growth.

One of the more interesting graphics was one illustrating wired and wireless telephony penetration as a function of GDP per capita.

If you told someone 20 years ago that wireless telephony would trump wired telephony they would have told you to stop reading so many Sci-FI books, and start focusing on the monopolistic threat posed by Ma Bell and her telephony monopoly.

Here we are today, attempting to predict a winner between  Cable broadband and Telco DSL/FTTH broadband. Or worrying if any alternatives will exist without direct government intervention and subsidies.

Is it possible, 20 years from now, that current concerns of FTTH and the duopoly of Cableco/Telco last-mile access appear absurd in the face of widespread, inexpensive high-speed wireless access?


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  1. Andrew

    I’m not confident 20 years out, but I’m pretty sure for 5-10 years wireless will be at best a secondary player in the U.S. highspeed Internet beyond mobility. That follows if you believe that most people prefer watching television to reading, and therefore much of what goes over the web will be video. (Disagreement is reasonable)

    With most homes in the U.S. going HD, you’ll need 5-10 megabits per channel. Cable is finding enormous response to Start Over and other timeshifting, and building to a high unicast network, as is FIOS. Everything I know about likely wireless deployments can’t deliver a high volume of unicast video, and I think that will give telcos and cablecos an enduring advantage. My guess is the Clearwires of the world will only get beyond mobility where the local telco/cableco is too greedy The marginal cost of broadband is under $8 and dropping, so they have plenty of room to retaliate if they start losing market share.

    Networks are big, expensive, and take a long time to build. So without a surprising breakthrough in powerline, wireless, or social policy I’d bet the two current players will have 80-95% of the (non-mobile) market in five years and probably ten.

    Why would you think I’m wrong?


    Posted by Dave burstein | June 7, 2007, 4:01 PM
  2. I believe that virtually all video content, with the exception of Live events, can be pre-downloaded in anticipation of viewing. The “long tail” gets a lot of attention, but the reality is the “fat ass” it is attached too is made up of only a handful of content. People could become accustomed to subscribing to certain elements of the long tail with other choices selected for them by computer (there is the Dr. Strangelove Element). All of this could be happening 24/7 in the background, storing protected content on a set top box with a big hard drive.

    Existing over the air technology and the cable plant could be used for distribution of live events.

    Wireless is very close to meeting the requirements of an above scenario.

    I would agree that in 5-10 years the two current players at 90%. But opportunity for massive disruption does exist. Give me long odds and I’ll take them.

    BTW – I am not trying to say the fact that the potential for wireless should eliminate concern over competition/regulation etc. My point is that people fail to account for unanticipated events that could make the whole argument moot.

    Posted by Andrew Schmitt | June 8, 2007, 7:53 AM
  3. Pre-downloading videos in anticipation of viewing eliminates the impulse buy. Anything slower than streaming rates eliminates the impulse buy. And the big advantage that electronic delivery of video (whether it’s VOD, over the top video, whatever) has over Blockbuster is the impulse buy.

    People could become accustomed to subscribing, but they won’t. It’s an instant gratification world, my friend – subscribing requires entirely too much forethought.

    Posted by DG Lewis | June 8, 2007, 10:18 AM
  4. What I am saying is the software can anticipate your impulse buy ahead of time and pre-cache the content locally.

    When I had a Tivo, it was spooky how well it guessed what I might want to watch.

    Posted by Andrew Schmitt | June 8, 2007, 10:23 AM
  5. Any thoughts on what accounts for the lack of a spread between wireless and landlines in the US? Every other country seems to have a very significant spread. I can think of ten different reasons all of which are plausible and conflict with each other to some degree. In addition, this graph would seem to imply that there will be dramatic growth in US handsets at some point but all the US carriers say the market is about taking share because with 225M subs, 75% of people already have a cell phone.

    Posted by Bill Burnham | June 8, 2007, 1:15 PM
  6. It may be an inflated number of landlines due to faxes, home offices etc. Note the landline penetration in the US is one of the highest.

    I think the issue is mobile penetration is low on an absolute level. The spread isn’t as meaningful of a statistic.

    Maybe there is also a double counting effect where work and personal cell phones are counted, and people in the US don’t bother with a personal phone if they have one at work.

    It’s a good question. There may be 225M subs in the US but I don’t think 3 of 4 people have a mobile.

    Posted by Andrew Schmitt | June 8, 2007, 3:46 PM