Fixed Internet – Creeping obsolescence.

A Small light at the end of the 5G tunnel.

• The latest data confirms what RFM’s Digital Life Pie has been indicating for some time: namely that increasingly, mobile is the Internet access medium of choice in developed markets.
• This represents a major change from just 2 years ago when Fixed internet was the first port of call for most activities with mobile being used when fixed was not available.
• Data from OpenSignals (see here) shows that the number of countries where cellular download speeds are faster than WiFi currently stands at 33 and is growing fast.
• Many of these countries are in emerging markets where poor quality fixed infrastructure combined with relatively recent roll-out of cellular coverage has led to mobile taking a substantial lead.
• This means that in emerging markets, a device with a cellular connection is the only practical way to gain access to the Internet.
• Hence, almost all Digital Life activities take place on a smartphone rather than being split between a smartphone and other devices that use a fixed internet connection (tablets, PCs, Laptops, TVs etc.)
• This is why there have been two Digital Life Pies; one for developed markets and one for emerging or mobile-first markets.
• The main difference between the two has been that Gaming and Social Networking have dominated the developed markets pie while mobile-first markets have been more evenly balanced between the major digital activities.
• As mobile connectivity has become closer to fixed and as the average screen size of a smartphone had risen, more activities have migrated onto smartphones.
• The result has been that the Digital Life pie for developed markets is changing to look more like the mobile-first markets pie.
• This makes complete sense when taken into account with the SignalsFirst data which is indicating that cellular is slowly becoming a better Internet connectivity option.
• There will be some regional variations, but the global trend is quite clear.
• The one exception is for the enterprise and content creation.
• There are very few if any, plans which offer truly unlimited data on cellular networks and computers consumer vast quantities of data.
• Hence, while there remains no true unlimited connectivity options on the mobile Internet, the enterprise is likely to remain predominantly on the Fixed Internet.
• This is good news for proponents of 5G because, in RFM’s opinion, this is a technology that it is looking for a use case outside of Fixed Wireless Access in the USA.
• The main use case proposed (connected cars and autonomous driving) does not hold water as in RFM’s opinion it could easily be achieved using the existing 4G technology (see here).
• However, if 5G can make truly unlimited data plans an economic reality once again, then as more and more traffic migrates to mobile there is scope for it to take off.
• However, this will be a very long time coming as 4G is already extremely good and it will take time for the substantial problems and limitations of 5G to be solved.
• Hence, I do not see this as a reason to look more optimistically upon the network infrastructure industry in the short-term, but there is some light at the end of the tunnel should 5G be able to live up to some of its promise.