To say that 2020 has not been a year of business as usual would be a supreme understatement, as the COVID-19 pandemic disrupted nearly every aspect of nearly everyone’s daily life. Nevertheless, the broadband and telecom industry managed not only to meet increased demand but also to make progress on broader initiatives, as we note in our roundup of 2020 telecom trends.
Telco/ Electric Partnerships are a Real Thing Now. We put this trend first simply because it’s something Telecompetitor has noted, but that hasn’t received widescale recognition. Traditionally, telcos and utility companies have been wary of working together, viewing one another more as rivals, especially at the local level. There have been a few exceptions in recent years, but 2020 seems to be when attitudes changed more broadly. In reviewing our coverage for 2020, we noted five new telco/ electric partnerships and there are certainly many more we didn’t cover.
Those we did cover include Windstream and a Georgia rural electric membership cooperative (REMC), Watch Communications with an Indiana REMC and an Illinois REMC in projects that also involve Microsoft, Wisper ISP and a Missouri REMC, Smithville Communications and an Indiana REMC, and Cincinnati Bell and an Ohio REMC.
Broadband Industry Unscathed by Pandemic. Despite traffic surges felt by all types of network operators amid the COVID-19 pandemic, the network operators, by and large, were able to meet traffic demand. Hundreds of service providers also signed on to the Keep Americans Connected Pledge, agreeing not to cut off customers who couldn’t pay their bills as a result of financial hardships caused by the pandemic. In the CARES Act passed in April, legislators made funding available for telehealth technology and boosted the budget for the USDA ReConnect program and it looks like there will be billions more for broadband related initiatives in the next pandemic relief package.
Rural Broadband Finally Gets Policymakers’ Attention. The COVID-19 pandemic drew attention to the lack of broadband in some rural areas – and willingness to provide government funding for broadband seems to be on the rise. That’s a good thing, considering that the current Universal Service funding mechanism appears increasingly unsustainable.
The USDA ReConnect program awarded hundreds of millions for rural broadband in the form of grants and loans. And the FCC Rural Digital Opportunity Fund (RDOF) awarded $9 billion in funding through a reverse auction. But there’s still work to do, including getting better data on broadband availability and getting plans for a Rural 5G fund off the ground, as well as planning for the second-phase RDOF auction.
Broadband Gets Faster – in Lots of Different Ways. No 2020 telecom trends roundup would be complete without noting that broadband speeds are on the rise as telecom providers undertake more 10 Gbps fiber deployments and the cable industry takes a totally different 10G approach. Meanwhile, non-geostationary satellite providers expect to deliver 100 Mbps speeds without the latency problems of geostationary satellites. Fixed wireless also is delivering unprecedented speeds – even supporting gigabit speeds in certain conditions. Consumers are embracing faster speeds as well, with one report pegging gigabit adoption growth of 133% year over year – and an increase of 75% during the past six months alone.
Fixed Wireless Sees Broad Adoption. Fixed wireless isn’t just for wireless internet service providers anymore. Wireline and mobile providers also are deploying it. AT&T, Verizon, T-Mobile, CenturyLink, and Windstream are just a few companies that are deploying the technology. Speeds supported have increased considerably and economics have improved. And some bidders in the RDOF auction have the option of using fixed wireless to bring gigabit service to unserved rural areas.
Fierce Competition in 5G. Competition in the U.S. wireless industry has long been intense, and that intensity shows no signs of lessening – particularly on the 5G front. T-Mobile claims its mid-band network offers the optimum mixture of speed and coverage, while Verizon and AT&T are investing a lot of time and effort to position themselves for opportunities that they see in the enterprise market. Edge computing is hot, driven in large part by the desire to leverage the low latency of 5G networks to support industrial IoT applications and others.
Spectrum Never Goes Out of Style. As more and more traffic moves to mobile devices and as fixed wireless gains momentum, it would seem that a network operator can never have too much spectrum. This year already has seen two auctions of spectrum suitable for 5G deployments, including a millimeter wave spectrum auction and the CBRS auction of vaunted mid-band spectrum. As of today, another mid-band spectrum auction, the C-band auction, is underway and already has raised more money than any other auction in U.S. spectrum auction history. Demand still exceeds supply for the vast majority of licenses, suggesting overall proceeds will be more than any of us imagined.
Video Business Gets More Splintered. The video business remains the most difficult to predict as more and more consumers opt for streaming options and more and more streaming services are launching. Telcos continue to move away from traditional linear video offerings and even cable companies have stopped worrying about traditional subscriber losses. Nevertheless, AT&T is sticking to its ambitious video plans, despite the objections of some shareholders.
Telecom Bankruptcies Prove to be No Big Deal. In our year-end wrap-up for 2019, we noted that Windstream had filed for bankruptcy and Frontier was expected to follow, which it did. Since then, Windstream emerged from bankruptcy and Frontier is on a path to do so and the industry has barely noticed. And while neither company has a mobile business and both companies continue to face challenges on the broadband front where they must compete with the cable companies, they both were big winners in the RDOF auction, which should help improve their broadband competitiveness.
Broadband M&A Remains Hot. The past year was another big one for broadband mergers and acquisitions – so much so that we will be devoting a separate roundup post to the topic. Look for it in early 2021.
Thank you for reading out 2020 telecom trends roundup. Telecompetitor looks forward to providing continued coverage on all these top broadband and telecom trends, and any new ones that may develop, as we move into the next year.