In a blog this past May, Ian Olgeirson and John Fletcher, analysts at Kagan, a media research group within the TMT offering of S&P Global Market Intelligence, posited that the U.S. broadband market will become a battle for market share as broadband penetration exceeds 90% of U.S. occupied households. Massive government funding programs aim to get that penetration rate closer to 100%, and thus we’ll see infrastructure expansion – much of it fiber – progress towards that goal.
But we’re also seeing infrastructure expansion for the sake of grabbing the market share the Kagan analysts discuss. Our cover story describes how some cable operators are using fiber deployments to enter new markets. The new satellite systems are getting a toehold in emergency services and rural access – but you can bet that’s not the only applications they were designed to address. Meanwhile, wireless operators such as T-Mobile also are rolling out mobile-based broadband offerings.
Such initiatives are great for consumers. But, the blog authors assert, “There simply are not enough subscribers to accommodate the growth ambitions of each segment.” Those who remember the Internet Bubble and all the carrier startups aiming for 40% of the long-haul market, might rightly shudder at those words.
We’re not at a point where we need to worry about a broadband fiber glut. But, taking all the different service provider segments together, it might not be too early to wonder whether the current roster of broadband services providers will shrink significantly over the next 10 years.