Future of Broadband Competition in a 5G World

This paper explains how Mobile Network Operators (“MNOs”) are transforming their networks to meet the 5G challenge and the implications this transformation has for the structure of the cellular industry and broadband competition more generally. Among the many changes both large and small, the transition to 5G is driving MNOs to embrace: (a) agile management of diverse spectrum assets; (b) small cells; and (c) softwarization and virtualization. I explain how the 5G Future will be a converged market in which promoting the survival of fewer but stronger MNOs will promote the healthy evolution toward 5G, which will contribute to promoting innovation and sustaining energized competition across the broadband ecosystem. Accelerating the race to 5G will help intensify competition within the larger ecosystem from four important directions.

1. Economies of scale for nationwide wireless operators are increasing with advances in network technology and architecture, which makes sustaining the pace of investment required to remain competitive with Verizon and AT&T more challenging for smaller operators.
2. The move toward 5G will further drive the convergence of fixed and mobile broadband, which will increase the potential for intermodal competition between fixed and mobile providers and among wireless networking technologies (e.g., Wi-Fi and 4G-LTE-derived networks). The long-awaited convergence of fixed and mobile networking and the enhanced capabilities and localization of advanced wireless networking are creating new avenues for competition that increase the competitive pressure on the existing MNOs. 
3. The transition to smaller cells and more dynamic/flexible and heterogeneous local networking requirements, coupled with advances in networking equipment and software solutions, will open opportunities for new types of local facilities-based wireless infrastructure providers. These opportunities will include venue networks and neutral host deployments.
4. The increased capabilities to virtualize every type of information communication technology (“ICT”) resource (including network resources) and grow demand for customized networking services will lead to more vigorous Mobile Virtual Network Operator (“MVNO”) competition.