While AT&T and Verizon focus on 5G, acquisitions and almost everything that is not their traditional business, Comcast and Spectrum are eating their lunch!
CenturyLink is too busy with its Level3 acquisition to be effective. Yet they weren’t that effective BEFORE that either retaining business.
Comcast Business is a $6.5 Billion CLEC that started in 2006. Every single dollar that Comcast Business or Spectrum Business gets is taken from the ILEC. Windstream and Frontier cannot afford that at all.
As Comcast (and literally every other provider) rolls out SD-WAN, this will eat revenues from the Big 3 ILECs faster. SD-WAN is mostly rolling out to retail, restaurant and branch offices. It is mostly with a broadband connection and 4G. That is a T1 or other TELCO revenue, now gone to Cable and Cellular.
Granted some of that revenue goes to AT&T or VZW as 4G, but most of it goes to cable for broadband. Also, as SD-WAN starts to replace MPLS and other WAN connections (and as T1 circuits sunset), all of THAT Telco revenue disappears from CenturyLink/Level3, AT&T and Verizon.
They are not going to replace that margin with cellular, ads, TV or other. Everything is not a sunk asset like the telecom network that they have milked since 1900.
You could say this is gloom and doom, but it is the reality.
And it will be tragic for the industry.
At what point does the cable broadband service stop being a reasonable replacement for T1?
At what point does 4G become too congested?
We’ll see it in the analytics, since SD-WAN is supposed to add transparency to the WAN. Should be interesting because cable loves to raise prices, especially when they are the dominant provider in an area.
Consumers are screwed!
But so are the ILECs. All that juicy margin from MARCON contracts with Fortune 5000 going south.