There are currently about 20% of homes in Australia without a broadband connection. This number has been declining, steadily shifting from DSL and Cable to Fibre. Of the 20%, there are some rural households where mobile or satellite is the only option. But there are others who are actively choosing to go mobile-only. Not surprisingly, this mobile-only group are likely to be younger, poorer, more transient, and more tech savvy. Fixed broadband is expensive in Australia by global standards (partly due to its geographical size), and if you don’t use much data at home, a mobile-only subscription could be a rational choice – especially if you can use free WiFi at work. The genuine possibility of unlimited mobile data plans could increase the likelihood of mobile substitution in some parts of the market. If new mobile players trigger a price war, the cost of mobile data may fall significantly, providing more of an incentive to go mobile-only. However, data usage in Australia is sky-rocketing as bandwidth intensive streaming services take over the living room. ACMA reported data consumption grew by 43% in the year to June 2017, with a phenomenal 90% of that growth over fixed networks. In 2018, we expect the growth in data consumption in the home to continue, largely neutralising the mobile-only threat. Operators with fixed and mobile businesses will guard against the mobile-only threat in two ways: one is bundling entertainment services into the access bundle, providing additional value in the broadband subscription, such as unmetered streaming applications, or increasingly, guaranteed quality of service or experience for those applications. Secondly, developing convergent offerings, which blur the distinction between fixed and mobile access types, and instead offer tools which allow customers to alter preferences, and the appropriate access type is selected accordingly – for example ‘always default to the cheapest, fastest or most secure’ network. Mobile-only: turns into wireless-only, aka fixed-wireless access So what about the longer term prediction of fixed-wireless access driving 30-40% of households to rely on wireless data at home? This is unlikely, but not impossible in Australia. Fixed-wireless has played a niche role to date in Australian cities and towns. For example, in on-campus services at universities, where multiple buildings on a large site can make the cost of setting up a transmission tower and receiving equipment competitive with laying fibre to every premise. But the bigger use case for fixed-wireless is in rural and remote communities. Large distances between properties, a flat topography and no existing fibre network are perfect conditions for fixed-wireless solutions. Indeed, the NBN’s Multi Technology Mix (MTM) strategy has made a fixed-wireless service available to around 500,000 households, with wholesale speed tiers from 12/1 to 50/20. Our analysis also suggests that as more spectrum is released, and new technology such as carrier aggregation and mm-Wave comes into play, fixed-wireless will represent a potentially viable alternative to fixed broadband in more areas. But growth in fixed-wireless as an alternative access type is not just a question of economics. It’s a question of government policy, timing, and operator strategy. For example: Firstly, the timing: while some 5G capability is expected to be trialled at the Commonwealth Games in 2018, by the time 5G becomes real for consumers, the NBN deployment should be complete, and likely modified pricing of its fixed-wireless product, driving take-up in markets where there is a lack of fibre connectivity Secondly, as they did with Long Term Evolution (LTE), operators will likely choose to maintain high pricing per GB for mobile data in order to maximise yield from spectrum acquisition with the cost of cell densification to support 5G to needing to be covered somehow Thirdly, given the significant tax payer investment in the Multi Technology Mix (MTM) network, even if government policy were to encourage a sale of that network to mobile operators for backhaul, the pricing would need to reflect the network cost and substitution risk, further increasing the mobile premium There is of course the possibility that new owners of mobile spectrum could use it to make a fixed-wireless play in certain locations. So watch this space, because things are certainly about to get interesting. This article was written following the launch of TMT Predictions 2018, in which Deloitte predicts increased uptake of mobile-only and fixed-wireless in North America. Read the 2018 TMT Predictions.