2016 USA - Telecoms, Mobile, Broadband and Digital Media - Statistics and Analyses

FCC urges further work to deliver faster broadband services to America

The US still trails its OECD counterparts in terms of broadband penetration, speed and affordability. Nevertheless, the market is currently witnessing significant investment activity in fibre deployments, HFC upgrades with DOCSIS3.1 technology, and mobile broadband networks. Much of the investment in fibre is being undertaken by a significant number of smaller players and municipalities rather than the two key telcos, AT&T and Verizon, which are concentrating on a hybrid fibre/copper network and limiting future upgrades beyond what has already been achieved. Indeed these operators have emphasised their wireless focus in recent years, which has meant that cablecos have made most of the gains in new broadband subscriber adds in recent quarters.

Broadband services in most regions still lack effective competition, with an effective duopoly operating in many areas of the country. Municipal activity, often geared at breaking this stranglehold and introducing competition and innovation, continues to be stymied by lobbying pressure from the main telcos. However, the FCC’s National Broadband Plan envisages a greater role for public FttP networks in the pursuit of its goals, and in the activities of muni-networks will form a large part of the patch-work fibre deployments across the country in coming years.

There is growing recognition of the importance of a trans-sectoral approach to broadband networks, including the health, education and energy sectors, in order to fully realise the benefits of the nascent digital economy. The FCC’s 2016 Broadband Progress Report reveals how much still needs to be done to move the US broadband market forward.

Given the size of the US market, and the growing demand for data on both fixed and mobile networks, there is continuous pressure for operators to invest in fibre backhaul networks and to push connectivity closer to consumers. In recent years the US has seen increased activity from regional players such as Google, with its successful investments in a number of markets.

Growth in the US mobile subscriber base remains strong despite penetration levels of above 110%. Declining revenue from voice services is compensated for by high growth in mobile data use, itself supported by excellent networks supporting LTE-based services and the high penetration of smartphones, which is more than 90% for some carriers. Mobile data use will grow more rapidly after 2018 when 5G services, due to be trialled later in 2016 by at least three network operators, become commercially viable.

A major development into 2016 will be the auction for spectrum in the 600MHz, and the use made network operators of their concessions. In addition, there is strong support for the use of unlicensed spectrum for LTE, though detractors have expressed concern that congested airwaves could impact on Wi-Fi services.

This report reviews several aspects of the US telecoms market. It details the cable, DSL, Wi-Fi and WiMAX broadband sectors, providing market analyses as well as a range of relevant statistics in general and on the key operators. The report also covers FttP market and related fibre network developments and deployments. In addition, the report analyses the US mobile market, including telcos’ financial and operating data to Q4 2015 and an assessment of telcos’ strategies as customers continue to migrate from 2G to LTE and as 5G gets underway.

Key developments:

• Cable ONE planning 1Gb/s service across 200 cities during 2016;
• FttH Council counts 26 million premises passed with fibre;
• Google Fiber extended to four more cities;
• AT&T, Verizon and T-Mobile US announce plans for 5G trials by end-2016;
• T-Mobile US secures additional 700MHz blocks for $1.3 billion;
• Google trials facial recognition m-payment system;
• FCC considers both low-end and high-end spectrum bands for possible 5G use;
• FCC prepares for auction of 600MHz broadcast spectrum;
• AT&T to close down 2G infrastructure by end-2016;
• Comcast announces its first DOCSIS3.1 markets;
• Altice Group acquires a 70% stake in Suddenlink Communications, makes bid for Cablevision;
• $1.5 billion allocated to round 2 of the Connect America Fund;
• New York state proposal for $1 billion investment in broadband infrastructure;
• FCC rules 25Mb/s as a newly defined broadband speed;
• Report update includes the FCC’s 2016 Broadband Progress Report, telcos’ operating and financial data to Q4 2015, recent market developments.

Companies mentioned in this report:

Clearwire, AT&T, Verizon, MetroPCS, US Cellular, Qwest, CenturyLink, Frontier Communications, Windstream, Fairpoint, Cincinnati Bell, Comcast, Google, HughesNet, ViaSat, AT&T Mobility, Verizon Wireless, Sprint Corporation, T-Mobile US, TracFone, MetroPCS Communications, Leap Wireless, Frontline, Alltel.