US Mobile Broadband Marketplace


US Mobile Broadband Marketplace










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US Mobile
Broadband
Marketplace

by Michael Gariffo

Copyright 2021, Faulkner Information Services. All Rights
Reserved.

Docid: 00021600

Publication Date: 2105

Report Type: MARKET

Preview

The US mobile broadband marketplace is one of the most dynamic in the world
with the technological decisions and developments being made here echoing around
the globe for years to come. Since the inception of 3G technologies, the race has
been ever more fierce to be the first to find, develop, and exploit the
fastest, most efficient networking protocols, frequencies, and speeds. This
competition has taken the US mobile broadband market through the birth (and
occasionally death) of technologies such as WCDMA, EV-DO, WiMax, and the
still-reigning dominant mode of mobile broadband, LTE. Of course, the industry will
never rest on its laurels and has begun, in earnest, installing and expanding the next generation
of wireless broadband, with 5G technologies promising throughputs approaching or
exceeding what wired broadband currently offers. This report will examine the
current state of 4G technology and the developments
in 5G networking that have already begun.

Report Contents:

Executive Summary

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Telecommunications
in the US Marketplace

The US mobile broadband market once again finds itself at a tipping point.
The first 5G installations are beginning to crop up in major cities across the
country, and all three major US carriers are in various stages of completing nationwide rollouts.
These coverage areas remain generally miniscule when compared to
the massive installations of 4G LTE infrastructure that these same carriers have
spent the better part of a decade installing all over the US. Further
complicating the matter is also the way in which each carrier defines 5G
services. While one provider may offer a service branded as 5G that provides
speeds that are little better than a decent 4G LTE connection, another may
provide a service that is also branded as 5G, but exceeds even the speeds
provided by terrestrial, fiber-based broadband services.

Consumers continue to wait for carriers to universally offer download rates
on par with what one might expect when hearing the 5G designation. However, in
the meantime, newer technologies such as carrier aggregation, LTE-A (LTE-Advanced), and
others have increased the maximum speeds on current networks beyond what was
thought possible just a few years ago. Like 3G before it, these developments
will continue to be important for at least the next three years, while 5G
continues to proliferate and expand beyond its current state of inconsistent availability in
clusters primarily centered around the densest urban centers.

This 5G buildout will take the same course as its 4G
and even 3G ancestors. In fact, it is already on the same track in its infancy,
with true 5G offerings having now been installed in some of the most highly populated metro areas.
Yes, T-Mobile does claim to have a nationwide 5G network. And, while this is
technically true on a legal level, its speeds have really not changed much when
compared to its previous 4G offerings thanks to the actual technology behind
this 5G infrastructure. It must be said, however, that
it is only a matter of time before it, and its competitors, begin to slowly spread
their fast 5G services to the suburban and rural markets, once
city centers have reached full saturation.

Because this is the outlook for the few years, at least, it is
important to examine not only the birth of 5G but also how 4G LTE will continue
to evolve and develop. The modern LTE marketplace sits at a point where it is
beginning to cope with growing customer expectations such as powering 4K media
streaming, increased video call usage, and other bandwidth-heavy tasks that
consumers are now performing on a daily basis. 4G LTE’s ability to remain viable
until 5G technologies reach the majority of consumers is paramount to the health of the US
mobile broadband market as a whole for the next several years. 

Market Dynamics

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Traditional wireline
services such as fiber, cable, and Digital Subscriber Line (DSL) have been providing
broadband communications services to consumers and enterprises for more than a
decade. Improvements in fixed wireless technologies such as Wireless Fidelity
(Wi-Fi) have given users limited mobility for broadband
services within a confined area of a few hundred feet. True mobility
outside of Wi-Fi range meant relying on communications
technologies such as general packet radio service (GPRS) with data speed
capabilities unsuitable for applications such as Web browsing.

Technological advances in
network services delivery and communication access devices are creating new
services and revenue opportunities for users and carriers. As wireless networks
and access devices evolve from 4th Generation (4G) to the 5th Generation (5G),
the capabilities for providing mobile broadband services are likewise evolving.

Data and broadband services have become an increasingly important part of the
wireless telecom experience. Where US customers in 2010 used only 388 billion
megabits (Mb) of data, that number grew to 28.58 trillion Mb of data in 2018, a
mind-boggling increase in less than a decade, and nearly doubling the previous
year’s total.1 Meanwhile, voice minutes used
over the same period went from 1.495 trillion to 2.4 trillion, not even
doubling.2 This shows the incredibly massive shift in how mobile
devices are being used now versus how they were being used at the start of this
decade: from primarily being voice
communication devices relying on traditional cellular networks to being
predominately mobile computing devices. This shift was, of course, powered by
the growing number of smartphones in use during this period as well as their
inherent capability to offer data-hungry services such as mobile video and audio
streaming and online gaming. Whatever the factors involved, the result
is that the US is consuming data at a rate never before seen and never
even thought possible just five years ago. It is of the utmost
importance for carriers to provide uncongested, reliable, and fast networks with
plenty of room for growth. 

3G

3G is the term used to
describe the generation of mobile services that provided the first level of
download speeds considered to be "broadband." It
was the protocol through which many smartphone and feature phone users first
accessed the mobile Web, mobile data applications, and multimedia content. The International
Telecommunication Union (ITU) defined the
technical requirements and standards as well as the use of spectrum for 3G
systems under the IMT-2000 (International Mobile Telecommunications-2000)
program. The ITU required that IMT-2000 (3G) networks, among other
capabilities, support data services at minimum transmission rates of 144 kbps
in mobile (outdoor) and 2 Mbps in fixed (indoor) environments. Obviously, these
goals seems somewhat paltry by the standards of today’s speeds, but they were,
nonetheless, the peak of what was possible at the time when 3G was the dominant
protocol.

4G

4G is the fourth
generation of cellular wireless and is the successor to 3G standards. This is
the generation in which most of the US mobile broadband market currently finds
itself. Following years of upgrades and buildouts by major and lesser-known
carriers, the 4G standard in the US has been firmly cemented as using LTE
(Long-Term Evolution) technology. This was not initially the case, however, as a
war broke out between LTE and WiMax to see which would take the crown as the
true 4G standard. Following several years of rivalry, the death knell for WiMax
began to sound when both Verizon Wireless and AT&T chose LTE over the
competitor. Although WiMax was initially the protocol of choice at Sprint,
even that carrier was later forced to switch to LTE as its 4G technology, prior
to its merger with T-Mobile.

Like 3G before it, 4G is also defined by a standard from the ITU, in this
case the ITM Advanced standard, which has now replaced the IMT-2000 document
used to define 3G. While the parameters of IMT Advanced are numerous, the most
important requirements are a maximum ideal download rate of at least 100Mbps,
making 4G LTE 50 times as fast as 3G standards.3 It should be noted
that this is the possible speed under ideal conditions, meaning
the signal is being transmitted within an indoor space, over a short distance,
and with no interference. In real-world scenarios, standard LTE generally tends
to operate at download rates closer to the 20-30Mbps range, or slower in areas
of extreme congestion, such as cities. Even at this somewhat diluted rate, LTE is
10 times faster than 3G and still faster than some in-home connections running
over older technologies, such as DSL.

As its full name would suggest, LTE was designed to be a durable standard
that could evolve over the years to continue supporting the needs of carriers
and customers alike. To this end, developers at major carriers and networking
manufacturers have continued to refine and expand the protocol with new
technologies and techniques designed to increase speeds and capacity. The most
successful of these newer LTE standards is LTE-A or LTE Advanced. This technology
remains under development but has already provided speeds of up to 300Mbps, with
theoretical speeds of 500Mbps or even 1Gbps on the table.4 As with
the aforementioned capabilities of standard LTE, these download rates are
measured under ideal conditions but are nonetheless exciting in their ability to
match or even exceed most in-home data connections even after the expected
slow-down of real-world conditions is applied to them.

While other technologies do exist that allow carriers to push the boundaries
of what is possible for LTE, these generally fall into a category known as
carrier aggregation. This technology uses multiple frequencies within a given
spectrum band to accelerate a connection by essentially widening its
bandwidth. While the effect does indeed provide greater download speeds and the
potential for less congestion, it still relies on the same actual communication
protocols as LTE. Essentially, it uses multiple simultaneous connections to
divide the labor of transmission across several channels. The best analogy
would be accelerating the amount of fluid that can pass through a drain by
attaching a manifold to it that splits into three separate pipes. While all of
those pipes are the same diameter as the original drain, the ability for the
water to utilize all three at once allows it to pass through the drain much
faster than a single pipe would. This is a somewhat creative solution that has
gained traction at most of the major carriers in the US, but it is still a stop-gap
measure while the world’s telecom developers work on the true next generation of
mobile broadband: 5G.

5G

At the time of writing, 5G is still very much in its infancy. The first real-world installation of 5G networks in the US have
now been made, thanks to forward-thinking regulators and device makers working
to ratify the standards and protocols needed to power these early installations. The most important of these
is almost certainly the Federal Communications Commission’s (FCC’s) decision to
begin designating spectrum bands for the development and proliferation of 5G.5
These bands primarily include swathes of airspace in the 28GHz, 37GHz, and 39GHz
bands.6 In addition to these slices of spectrum – all of which were
approved by the FCC on July 14, 2016 – the FCC is currently examining and
auctioning off airspace in several other bands in the hopes of encouraging 5G
proliferation across the country. This effort has continued for several years
now, with the agency clearing and auctioning off an increasing selection of
frequency parcels for use in 5G proliferation across the US.

5G remains in the early stages of its standardization by the ITU. So far,
the organization has defined the standard in the same terms used by the Next
Generation Mobile Network Alliance. That group authored a set of parameters that
include a peak theoretical download capacity of 20 gigabits, with requirements
that the network be able to reach the level of tens of megabits per second for
thousands of simultaneous users, as well as exceeding the 1Gbps mark for
multiple users within an indoor space. Although the full speed and capacity
parameters of the first 5G mobile networks to hit the market are somewhat
disparate, early tests have shown peak download rates ranging from around
500Mbps, to as much as 1.1 Gbps, although nearly all measurers have noted the
extreme fluctuations experienced when leaving the very small areas of coverage
provided by these earliest installations.7 This small coverage area
is largely due to these installations' reliance on MMwave technology. This
protocol provides rapid transmission, but poor range and penetration, making an
excellent experience for those within, at most, a few thousand feet of its base
station. Other 5G installations which rely on lower frequencies provide much
larger ranges and better penetration, but also only offer speeds well within the
range of what better 4G LTE service areas could already provide.

Speed is not the only consideration for 5G, however. This generation of
mobile broadband will face challenges that none of its predecessors had to cope
with. While these will include the obvious, iterative issues such as
higher-resolution video and audio streams, larger app files, and more intense
Web browsing, they will also include one of the most revolutionary factors to
impact the mobile broadband market in many years: the rise of the Internet of
Things (IoT). This term refers to the increasingly diverse bevy of connected
appliances, tools, sensors, meters, and other technologically "smart"
machines that are now or soon will be given access to the World Wide Web to
allow them to network with other occupants of the IoT. Within
the next few years, the dominant mobile broadband protocol in the US could be
powering things as different as the inventory tracking system at a massive
warehouse and the connected toaster that you use to make your breakfast. The
variety and scope of products that will soon need to be always-connected is
staggering. However, it is most certainly something the 5G protocol of choice
will have to deal with and a major deciding factor in which of the currently
in-development technologies will actually be viable.

Which direction 5G takes and what technology takes LTE’s crown as the new
leader of mobile broadband remains to be seen. Most predictions place the
availability of nationwide 5G mobile network installations capable of post-LTE
speeds at somewhere in the early 2020s.
This scenario would give the US mobile broadband market anywhere from one to
five years to
prepare for the future ahead.8 All three top mobile
carriers in the US (Verizon Wireless, AT&T, and T-Mobile) continue working
towards this milestone. While T-Mobile already claims to offer nationwide
coverage, the aforementioned reality of that coverage's speeds make the claim
more marketing asset that network reality. In truth, it will likely be several
more years before any kind of nationwide 5G network worth the moniker is on
offer from any of the top three carriers.

Market Leaders

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The US wireless market consists of numerous carriers and affiliates with
various networks being offered through multiple vendors thanks to Mobile Virtual
Network Operator (MVNO) agreements. Because of this reality, the vast,
vast majority of these subscribers were serviced by three dominant
carriers: Verizon Wireless, AT&T, and T-Mobile, with the remainder primarily
being accounted for by US Cellular, and other much smaller carriers.9

Table 1. US Mobile Broadband Market Share Q4 2020

Vendor

Q4 2020 Market Share

 Total Subscribers

AT&T

44.5%

222.5 million

Verizon
AT&T

29.5%

147.5 million

T-Mobile

24.9%

124.5 million

US Cellular

2.84%

6 million

Source: FierceWireless

Now that all three major US carriers have well-established LTE networks and
various levels of 5G availability, the main
differences consumers must examine when choosing a wireless broadband provider
are speed and network coverage. While these may seem like simple, mathematical
considerations, they can become much less exacting and much more confusing when
real-world situations are applied to them. For instance, a given carrier may
show that it has coverage within a certain urban area. However, that carrier’s
network may be particularly congested within this area, slowing its LTE speeds down
to the point where they are barely any faster than 3G speeds. Similarly, the frequencies used by one
carrier may be able to better penetrate to the office or apartment of a certain
customer, while the network of another carrier cannot. This makes the process of
finding a carrier a difficult one and often leads to consumers switching between
multiple providers over a several year period before being satisfied with their
service.

With all of this said, there are still national tendencies and averages that
can greatly aid a mobile broadband shopper when choosing a network. Among these
resources are several annual reports that study the network coverage and
download/upload rates of the "big three" carriers based on real-world
testing. Some of the most highly respected of these the annual "Mobile Network
Experience Report" and "5G User Experience Report" published by OpenSignal. In the 2020
and 2021 editions of its
research, the company’s analysts examined 4G LTE coverage by determining the
average percentage of time a typical LTE user could expect a viable LTE signal
to be present on their device while subscribed to each of the three major
carriers. The most recent results are below 

  • Verizon Wireless: 97.4%
  • T-Mobile: 97.0%
  • AT&T: 94.9%10

Although all three major carriers managed to improve their availability
figures when compared to the 2019 edition of the report, Verizon wireless retook
the crown it has previously lost to T-Mobile in this arena. That said, T-Mobile
was still able to improve its already impressive network, and is still nipping
at the heels of the much larger Verizon Wireless. Unfortunately for AT&T, it
remains in third place, because of T-Mobile's impressive performance and
Verizon's resurgent dominance.

While coverage is obviously important, download speeds must also be taken
into account when selecting a provider. As stated above, these can vary greatly
across the exact same network due to environmental factors, congestion, the
device being used, and more. This holds true for both 4G LTE and 5G networks. OpenSignal has calculated the average
national download rate by examining markets, devices, and scenarios across the
country to come to a single speed metric for each of the three major carriers.
The results below rank those national averages by download rate, shown in
Megabits per second for 4G LTE: 

  •  AT&T: 32.6Mbps
  • T-Mobile: 28.2Mbps
  • Verizon Wireless: 27.4Mbps11

After tying for the top spot in 2016, T-Mobile pulled well ahead of Verizon
Wireless in the 2017 speed test, and continued its reign through 2018. While the
duo continued to jockey for position, AT&T came along and surpassed them both in
the latest measurement. Still, it remains
impressive that T-Mobile has not only matched, but exceeded the speeds provided by the
one of the largest
mobile broadband carriers in the US. 

Examining the same measurement company's 5G speeds, it becomes clear why this
report has had to focus so intently on the reality of 5G speeds not currently
being able to match the expectations of the new technology. The national 5G
speed measurement averages for the top three carriers are below:

  •  T-Mobile: 58.1Mbps
  • AT&T: 53.8Mbps
  • Verizon Wireless: 47.4Mbps12

As can be seen in the national averages, 5G Speeds across the country are
almost all less than double their 4G LTE counterparts. This is nowhere near the
ideal 1Gbps rates supposedly made possible by 5G technology. The reasons for
this are numerous, including sparse availability, small coverage zones, and the
decision by all three carriers to brand areas as 5G when they are actually only
able to provide download rates more in line with 4G LTE coverage. These slower
zones are far more plentiful than their faster brethren, bringing each
carrier's national average down to what can be seen above. As faster 5G
technologies continue to proliferate and replace these slower locations, users
can expect these figures to rise dramatically. However, in the meantime, 5G
coverage in the US remains very much a work in progress.

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Continued Usage Growth

As mentioned before, the projections for data usage growth
continue to be astronomical in their volume, particularly for the US and greater
North American region. In fact, a projection from mobile technology maker
Ericsson predicts that there will be a twelve-fold increase in mobile data
traffic between 2015 and 2021, meaning that by the end of this year,
providers will need to have expanded and improved their current
networks to the point where most users can consume between 20GB and 25GB per
month.13 With some networks already struggling under the load that
consumers are putting upon them, this becomes an extremely worrisome scenario.
Thankfully, plans are already in place to cope with this eventuality, including
the aforementioned enhancements to 4G LTE, as well as the introduction of 5G
technologies that can much more efficiently handle network traffic than LTE ever
could.

Application-Based Usage

Some may be wondering at this point what use all this data will be put to.
The answer is primarily to power the growing number of mobile applications users
are accessing on a daily basis in 2021, particularly the rich
media aspects of those apps. The same Ericsson report predicted that, by 2021,
the consumption of data caused by mobile video streaming will rise 55 percent
from its current standpoint to account for the single largest portion of mobile
data usage at approximately 70 percent of all data consumption. Other areas of
growth in the 2021 timeline include social networking app usage at 41 percent,
audio streaming apps at 37 percent, and app downloads at 35 percent. Meanwhile,
growth in mobile Web browser usage is expected to grow by 25 percent, while
mobile file sharing is expected to get a 19 percent boost by 2021.14

Smartphones

Among the mobile devices that use the broadband data this report is
examining, the majority of modern usage is caused by smartphones. These devices
have become a ubiquitous part of many individual’s daily life, with frequent
emails, texts, social networking, and media consumption at every hour
of every day. All these activities lead to data usage at differing rates, but
they all add up to the majority of mobile data currently being used. Ericsson
expects this to continue through 2021, with 90 percent of mobile broadband data
usage in that year being accounted for by smartphones.15 

Tablets

The prevalence of video consumption in the future projections mentioned here
may lead some to wonder if US citizens will really spend that much time viewing their
movies and shows on a relatively small smartphone screen. The answer to this is
not entirely clear cut. While it is believed that short-form videos (such as viral videos,
shared videos, and short YouTube-style clips) will continue to dominate the
smartphone video streaming arena, longer videos will continually shift toward
being viewed on tablet devices.16 The reason for this is obvious, as
the larger screen real estate and typically better display resolutions and sound
output mean that most tablet devices are superior to their smartphone
counterparts for longer viewing sessions.

The Internet of Things 

As stated above, the IoT plays a huge role in the future of 5G development.
However, it may not necessarily impact the exact same networks as the ones this
report has covered. Some industry
engineers believe it may be better to separate the networks that will power future IoT
development from those that will continue to power our current smartphones, tablets, and
mobile PCs. This is due to several factors. First, and perhaps most obvious
among them, is the prevention of interference. The more devices on a given
frequency band, the more chance there is that they will interfere with each
other. While agencies like the FCC regulate these matters to prevent such
circumstances, the sheer volume of devices expected to populate the IoT would
make the task of interference prevention extremely difficult if not impossible.
This segregation of device types from the start may be a way to prevent
unnecessary crosstalk between networked devices and avoid an entire set of
harmful networking issues before they ever start. 

Another consideration is the relative speeds, ranges, and reliability
levels required by IoT devices in comparison to something like an average
consumer’s smartphone. While a smartphone of the future would need ample
bandwidth for streaming 4K or even 8K resolution videos, playing online games,
and more, a similar IoT device might need a miniscule fraction of that
throughput. Imagine a scenario in which a connected thermostat receives a
request to adjust the temperature of the room. This command would be, at most, a
few kilobytes worth of code. Similarly, a moisture sensor in a storage silo
could warn a farmer that a leak has been detected with even less data than the
thermostat would need. Because of the relatively tiny data consumption that many
IoT devices are expected to need, they could potentially operate on bandwidths
distinct from those for rich media streaming, opening up airspace that would
otherwise have been cluttered by competing device types.

Finally, reliability will be paramount for some IoT devices. While the
aforementioned thermostat could fail to receive a command without much chance of
a tragedy, medical devices on the IoT may face a much more dire outcome
should they fail to report correctly. Imagine a diabetic’s blood sugar sensor not
being able to provide a dangerous reading because the network was cluttered by
multiple users in an area streaming TV shows or music. The scenario may seem
like a worst-case one, but it is, nonetheless, possible. 

All of this is not to say that IoT devices as a whole should be barred from
utilizing the future 5G networks that US providers will build. However, their
actual needs should be carefully and precisely weighed before committing a
massive part of the future US telecom infrastructure to their use if a much
slower, much more well established connection could do the job just as well.

Outlook

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of this report]

Over the next few years, carriers will continue to expand and enhance their
LTE networks to support the growing demand from customers. This will be
increasingly necessary as traffic that was traditionally limited to desktop,
in-home PCs moves towards the mobile space. Yes, most carriers will at least
attempt to impose artificial restrictions on customer usage to also combat
network congestion. These will come in the form of both limited data plans and
data throttling practices such as limiting streaming video resolution or music
bit rates. However, these solutions are, as carriers know, stop-gap measures.
Not only are they less consumer friendly than simply having a network that is
capable of supporting whatever the customer wishes, but they have the potential
to run afoul of regulators.

While the Trump administration and its FCC leadership took a
laissez faire attitude toward the practice, this may not continue to be the case
under the new Biden administration. Carrier policies like T-Mobile’s 480p video resolution
limit for its Binge-On unlimited video streaming policy, or its 2Mbps limit
on online gaming, may eventually find themselves in the crosshairs of regulatory
investigations into whether US legislation is being violated. If governmental
agencies at that point were to find against the carriers, their network congestion woes could
quickly reach unprecedented levels.

Thankfully, this is an unlikely scenario as technologies that can alleviate
network congestion are currently being worked on and will be in place long
before 5G reaches market saturation. These include some things as simple as
shifting voice and texting traffic on many carriers to Wi-Fi (when available), to
something as complex as carrier aggregation and traffic shaping that can even
out the peaks and valleys of usage on a given network by intelligently
redirecting and rerouting traffic across the infrastructures of multiple
carriers.

Mobile broadband is becoming an increasingly important part of the
ever-more connected world. In the future, it will be the circulatory
system through which the lifeblood of the next information age will flow. It is
of the utmost importance that tomorrow’s data will be able to flow unimpeded if
we are to continue our astronomical level of mobile technology development. To
extend the analogy, one clot along this system could cause a disaster that could
bring the whole network to a standstill, causing irreparable damage to the health
of the US telecom market as a whole. Luckily, some of the brightest minds in
networking technology go to work every day to develop technologies, techniques,
and policies that keep the flow of mobile broadband traffic moving and the
health exchange of information over the airwaves flowing.

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References

1 "Annual Wireless Industry Survey." CTIA:
Everything Wireless. Retrieved October 2019. 

2 Ibid.

3 "Requirements Related to Technical Performance for IMT-Advanced Radio
Interface(s)." International Telecommunications Union. November 2008.

4 Parkvall, Stefan; Astley, David. "The Evolution of LTE Toward LTE
Advanced." Journal of Communications.
April 2009.

5 Wheeler, Tom. "Leading Towards Next Generation ‘5G’ Mobile
Services." US Federal Communications Commission. August 2015.

6 Ibid.

7 Andersen, Dave. "5G First Look Atlanta, Chicago, and Dallas: Promise,
Potential, and Real-World Performance." RootMetrics.
October 2019.

8 "The METIS 2020 Project – Mobile and Wireless Communications Enabler
for the 2020 Information Society." METIS
and the European Commission. July 2013. 

9 "Wireless Subscriptions Market Share by Carrier in the U.S. from 1st
Quarter 2011 to 4th Quarter 2020 . Statista. May 2021

10 "State of Mobile Networks: USA (January 2019)." OpenSignal.
Retrieved October 2019.

11 "US Mobile Network Experience Report." OpenSignal. Retrived May
2021

12 "5G User Experience Report January 2021." OpenSignal. Retrived
May 2021

13 "Mobility Traffic Q1 2016." Ericsson.
March 2016.

14 Ibid.

15 Ibid.

16 Ibid.

About the Author

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Michael Gariffo is an editor for Faulkner Information
Services. He tracks and writes about enterprise software and the IT services
sector, as well as telecommunications and data networking.

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