I periodically take a look at broadband trends into the future. But as I was thinking about how unique 2020 was for everybody, I realized that there were some events during the year that we’re going to look back on a decade from now as important to the broadband industry. Interestingly, most of these events were not on anybody’s radar at the beginning of the year.
Upload Broadband Entered the Picture
For the first time, we all started caring about upload speeds due to the pandemic. Millions of homes that thought they had good broadband suddenly found that the home broadband connection wasn’t good enough for working or schooling. Millions of people reacted to this by upgrading to faster download broadband speeds, only to find in many cases that the upgrade still didn’t fix the upload speed problems.
It also appears that a lot of people will continue to work from home after the end of the pandemic which means that the demand for upload speeds is not going to go away. This is going to put a lot of pressure on cable companies in markets where there is a fiber competitor. Fiber ISPs only need to advertise as the work-from-home solution to snatch customers.
Charter Pursues Rural Broadband
Charter looks to be the only ISP out of the largest four that is adopting a strategy to expand to rural areas surrounding existing markets. Charter has been the fastest growing ISP over the last few years, and it looks like the company wants to continue that growth.
I think the rural telcos are going to look back in a decade and realize they made a big mistake. The telcos have had repeated opportunities to upgrade broadband and dominate the rural markets, where they could have been a permanent monopoly. Instead, Charter is going to sweep through many markets and take most of the customers. Charter is going to be aided in this expansion by the $1.22 billion they snagged out of the recent RDOF grant.
Windstream Decides to Chase Fiber
If you go by what they’re saying, Windstream is coming out of bankruptcy as a new company. The company has said recently that it intends to build fiber to cover at least half of its historic telephone serving areas. This will catch Windstream up to the smaller telcos that have largely migrated to fiber as the only chance for long term survival. Of course, this also means that half of Windstream’s markets are largely going to be abandoned. Windstream customers have to be wondering which half they live in.
Satellite Broadband Goes into Beta
After years of being somewhat theoretical, Starlink has customers in beta test that are loving the download broadband speeds between 50 Mbps and 150 Mbps. All of the satellite companies still have a long way to go in terms of launching sufficient satellites to become a viable competitor – but we now have proof on concept.
Rough Year for the Supply Chain
The telecom industry, like so many others, has largely taken the supply chain for granted without a lot of thought of where network components are manufactured. 2020 started with price pressure on electronics due to tariffs and went into a tailspin when the pandemic hit Wuhan Province in China, where the majority of laser technology is made.
Electronics vendors have spent much of 2020 developing new sources of manufacturing. This means a downside for the Chinese economy, but an upside for many other places in the world. The new administration says it will fund an effort to move much of US chip manufacturing back to the US, and hopefully other electronic components will follow. The big advantage that the far east has had over US manufacturing has been cheap labor, but that might be largely overcome by modern and largely robotized factories. Hopefully, telecom vendors will take the needed steps to make sure we aren’t caught flat-footed again.