Connectivity Chronicles #20240531

Market Analysis: Understanding Telecom Competition

Frontier Communications expects minor impacts in Q3 and Q4 from the end of the Affordable Connectivity Program (ACP) , affecting 4% of its customers. The ACP, aiding 23 million low-income households with internet discounts, ends June 1. Frontier is piloting cheaper plans to retain affected customers. Efforts to sustain ACP funding face legislative hurdles, while some ISPs pledge temporary support, and lawmakers seek long-term solutions through the FCC’s Universal Service Fund.

T-Mobile is acquiring UScellular’s wireless operations for $4.4 billion , including 4 million customers and 30% of its spectrum assets. UScellular retains 70% of its spectrum and 4,382 towers, leasing 2,100 towers to T-Mobile. The deal addresses UScellular’s subscriber loss to larger carriers. The transaction involves cash and up to $2 billion in assumed debt, aiming for regulatory approval by mid-2025, promising cost synergies and potential lower prices for customers.

T-Mobile notified customers of price increases on May 22, triggering backlash due to prior guarantees of rate stability . Customers expressed anger online, with discussions of legal action. Eric Michelson, a T-Mobile customer, highlighted the contradiction between the price lock guarantee and the recent hikes. T-Mobile assured that Price Lock customers remain covered. Analysts anticipate subscriber losses due to the move, contrasting it with T-Mobile's previous un-carrier image. Competitors might exploit the situation with promotions.

Industry Perspectives: Insights from Telecom Leaders

Rethink predicts in 10 years, many young people will solely rely on cellular connections for internet, skipping fixed broadband. U.K.-based analysts foresee a shift where fiber is considered a utility, and cellular becomes primary. 6G is expected to support this trend, with InterDigital noting its capacity to replace fiber. Wi-Fi usage may decrease as public networks expand. Providers will adapt to meet consumer preferences, potentially reshaping the broadband landscape.

Nokia reported a 20% revenue drop in Q1 2024 but leads in private networking, ahead of Ericsson but behind Huawei. Analysts suggest private networking's growth won't compensate for Radio Access Network (RAN) market declines , estimating it at only 6-8% of the total RAN market by 2024. While private networking may offer a buffer, Nokia's ultimate recovery hinges on resuming public RAN growth and advancing technologies like 5G-Advanced, with open RAN representing a small portion of the market.

Market Trends: Exploring Telecom Innovations

AT&T and Cisco have introduced a new digital buying experience for businesses to adopt 5G fixed wireless access (FWA) , featuring Cisco’s Meraki MG52 and MG52E cellular gateways. These cloud-managed, eSIM-capable devices will be available this summer with AT&T’s integrated wireless WAN service. AT&T is targeting business customers with its FWA offerings, unlike its fiber focus for consumers. T-Mobile and Verizon will also offer Cisco’s FWA solutions.

Extracta Group specializes in removing copper cables from telecom networks, capitalizing on copper's high market value. With copper at an all-time high of over $5 per pound, telcos can profit by salvaging unused copper, aiding fiber deployments . Extracta audits networks, engineers copper removal, compresses existing cables, and finds buyers for salvaged copper. While not currently engaged with major telcos like AT&T or Verizon, Extracta offers expertise in safely and profitably extracting copper.

Althea, founded in 2017, leverages blockchain technology for decentralized internet services with flexible, pay-as-you-go plans. CEO Deborah Simpier likens Althea to "Linux for the internet," offering customizable connectivity options to improve rural broadband access. Users prepay for services, and transactions occur via a public blockchain. Community-run mesh networks using Althea operate in 13 U.S. states and four countries, facilitating better local internet access.

Connectivity Corner: Developing Telecom Infrastructure

Verizon is investing $100 million in AST SpaceMobile to provide coverage in remote U.S. areas where cellular signals are unavailable. This marks a shift from Verizon's previous reluctance to use terrestrial spectrum for satellite services. The deal includes $65 million in commercial prepayments and $35 million in convertible notes, using Verizon's 850 MHz spectrum. This partnership aims for 100% U.S. coverage and complements Verizon’s strategy for remote connectivity.

AT&T has joined the Telecom Infra Project's (TIP) Board of Directors, appointing Rob Soni, Vice President — RAN Technology, as its representative. TIP Chairman Yago Tenorio praised AT&T's leadership in open and disaggregated technologies. Soni aims to advance the commercialization of these technologies and support AT&T's goal to manage 70% of its wireless network traffic on open platforms by 2026. Soni brings extensive experience from previous roles at VMware, Nokia Bell Labs, and more.

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