There are some interesting conclusions one might draw about the relationship between “networks” and “business models” in the latest communications industry revenue forecast published by the Telecommunications Industry Association.
Consider that U.S. wireless revenue in 2012 will be about $335 billion, while fixed network voice revenue will be about $132 billion, with an additional $38 billion in broadband access revenue and $6 billion in television revenue, for a total of about $176 billion in fixed network revenue.
One obvious conclusion about the implications of networks for business models is that whether a network is wireless or fixed, a ubiquitous network, serving virtually all potential users–business or consumer–must, in fact, sell to both consumers and businesses.
There will be, in 2012, about 59 million consumer landline voice accounts in service, compared to 57 million business lines in service. A network that must serve virtually every house and business must sell to all those customer segments.
The revenue contribution for a consumer voice line is about $42 a month, the TIA report says. The revenue from a single business line averages about $142, though. And that suggests another key relationship between ubiquitous networks and specialized networks.
In 2012, U.S. businesses will spend about $63 billion on voice services and $34 billion on data communications services.
As competitive local exchange carriers and metro bandwidth providers obviously recognize, a specialized network, using limited owned facilities and a reasonable amount of leased facilities, can “cherry pick” the business accounts, both for voice and data communications.
A metro bandwidth providers will concentrate only on the largest buildings, data centers, carrier hotels and campuses in a metro area, building a limited optical fiber network to reach those locations.
Competitive local exchange carriers will primarily rely on leased facilities to reach a much-larger number of smaller and medium-sized businesses.
Mobile service providers, on the other hand, will use basically the same facilities to serve all customers, whether consumers, small businesses or enterprises. The difference is that wireless networks do not supply the really-high-bandwidth optical connections fixed networks sell.
Most cable operators use a hybrid approach, relying the basic hybrid fiber-coax networks to serve consumers and smaller businesses, but often building separate metro or regional fiber networks to serve enterprise customers who need high-bandwidth optical access.
According to the TIA, incumbents supply 95.5 million circuit-switched voice access lines, cable providers 775,000 circuit-switched lines and non-cable CLECs 21 million circuit-switched lines. Those figures are deceptive, though. Most cable companies are providing their voice service using IP technology, not circuit switches.
In 2012, VoIP access lines will be about 49 percent as large as circuit-switched lines, for example, suggesting that perhaps 58 million VoIP lines are in service. The National Cable Telecommunications Association claims 25 million voice lines, of which perhaps 24 million are VoiP lines.
That would suggest all the other CLECs have perhaps 33 million VoIP lines in service, most of which would be business lines.