Wireless has started its next transformation wave to 5G and beyond. So, which parts of the wireless industry will grow? Over the last few decades we have seen the industry change and grow, time and time again. The last major shift was with the iPhone and Android smartphones. Over the last decade we have seen the app market grow from a few hundred to more than two million. Now, let’s take a look at where wireless is heading and how you can stay on the winning track.
Typically, when the wireless industry grows and changes, it happens in one area and every player participates equally. However, going forward I see wireless growing, expanding and changing in many different directions simultaneously. So, growth will be very different going forward. How can we know which companies and which sectors will be hot and which will cool down?
In the past the industry as a whole shifted from analog to digital, then from 2G to 3G to 4G which is where we are today. 5G is coming next as all carriers prepare for this transformation over the next several years. Networks, cell sites and smartphones all need to be updated. This will take lots of time and money.
However, this time, I also see other areas of expansion, growth and transformation in the industry. This will impact every wireless service provider, every tower company, every smartphone handset maker and every other part of the wireless spectrum.
I see the competitive playing field changing. Only a few companies will lead this change wave. Others will follow. Still others will fail.
If that’s the case, let’s take a look at some of the winners going forward. Let’s take a look at some important change waves that are coming, and the companies and sectors that will do well.
AT&T transforms wireless, pay TV, entertainment into modern media company
AT&T Mobility is perhaps the most aggressive with their transformation strategy after their acquisition of DirecTV NOW and Time Warner which they renamed WarnerMedia. This will let a wireless carrier, deliver wireless TV and home pay TV, entertainment and all sorts of media over the Internet or over wireless with 5G.
The acquisitions and growth AT&T has shown in recent years shows it is turning into a full-service entertainment company or as they call it, a modern media company, along with their wireless, telephone and Internet business.
Their acquisition of DirecTV was transformative and created mobile TV, smaller bundles of television services letting customers save money and more. I fully expect WarnerMedia to be a big growth engine for the company going forward.
Just like the acquisition of DirecTV was one plus one equals three, I see WarnerMedia being a case of one plus one equals four or five. I expect AT&T to create and innovate new categories of wireless, Internet, pay TV and entertainment in new ways. This will create new directions for the industry the same way wireless TV and IPTV pay TV has already done.
In recent years, AT&T has rapidly become the largest provider of pay TV service in the United States. I expect that growth to continue during this industry transformation.
Xfinity Mobile is helping Comcast hang onto their customer base and grow
Comcast is the most innovative cable television company. The cable TV industry has been changing over the last several years. Comcast has created two different tiers of the cable TV industry. Comcast has the fastest Internet service, they acquired NBC Universal several years ago and just started their Xfinity Mobile service one year ago. Charter and Altice are still only cable TV, Internet and moving into wireless.
This variety gives Comcast the ability to spread their growth direction in several different directions at once. They have seen growth and I see that continuing thanks to their Xfinity Mobile service playing a key role.
Today, I would say AT&T and Comcast are the two most aggressive growth agents and change agents in the wireless, telecom, Internet, pay TV and content industries.
Competitors Verizon and CenturyLink are followers
There are also, next level competitors. These are companies like Verizon, CenturyLink, Charter Spectrum Mobile and Altice Mobile. They don’t drive change and transformation. Rather, they sit back and watch the changes in the industry. They don’t take the first mover advantage. So, they are never on the cutting edge.
So, while that means they are not one of the exciting competitors to watch, they are still very successful as a competitor. They don’t steer the industry change wave like AT&T, but they do ride the change wave well. They are successful followers.
Competitors Charter Spectrum Mobile and Altice Mobile are followers
Other cable television competitors are singularly focused on cable TV, VoIP and Internet. They have not expanded into television networks like Comcast NBC Universal. However, they are finally expanding beyond their traditional space with wireless.
Charter Spectrum Mobile and Altice Mobile following Comcast Xfinity Mobile and are expanding into wireless. Spectrum Mobile just started, and Altice Mobile will start next year.
While Xfinity Mobile seems to be very successful in wireless for Comcast, there are no guarantees Spectrum Mobile and Altice Mobile will follow this same path. It all depends on how well they market their new wireless services. Only time will tell, but the potential is there.
Either way, cable TV players will have an impact on the wireless industry. It will be interesting to watch how these companies integrate wireless with their pay TV and Internet services and how they impact the playing field.
Like Verizon, I don’t see Charter or Altice as leaders. Comcast is the leader in their space and the others follow. This is the same way AT&T is the leader in their space and the others follow.
AT&T and Comcast are leaders, while Charter, Altice, Verizon and CenturyLink are followers.
All these companies have the same ability to be successful, but only AT&T and Comcast seem to be driving the wave of change that is transforming the industry. With that said, Verizon, CenturyLink, Charter and Altice have a real growth opportunity if they play their cards right.
T-Mobile and Sprint need to merge to remain competitive in 5G world
The number three and four wireless carriers need to come together in order to remain a viable competitor as the wireless industry changes to 5G. This is a real threat and opportunity for T-Mobile and Sprint.
These are two companies who were struggling for survival a few years ago. T-Mobile got a new CEO named John Legere and have been growing in the last few years. They have passed Sprint and are now the number three wireless carrier. They are great marketers but have little wireless data spectrum.
Sprint was acquired by Masayoshi Son and Softbank and run my Marcelo Claure over the last few years. They have been in recovery mode as well, although not as vibrant as T-Mobile. They are not great marketers but have loads of wireless data spectrum.
That’s why coming together may be their best bet going forward.
New wireless competitors like Amazon, Facebook, automotive wireless and more
There are also other companies who see the changing world of wireless and who want in. We’ve seen this in the past as both Amazon and Facebook tried and failed several years ago. I don’t believe that failure means they are done. I think they will try to re-enter the wireless space.
In addition, there are all sorts of interesting possibilities like Netflix, Hulu, IBM and lots of smaller companies we are not even familiar with. Wireless could grow into a very interesting industry with several different sectors. The main sector with traditional competitors, and other sectors as well.
Example, the automotive industry is wrapping their arms around the Apple iPhone and Google Android wireless systems letting you use your smartphone as part of the car. If they are that interested in wireless, why not have a Mercedes or Lexus smartphone? We have never thought of that before, but that could happen along with countless other companies and industries.
Smartphone makers like Apple iPhone, Google Android, Samsung Galaxy
While wireless will continue to grow as an industry, there will be different slices of the wireless pie that grow and other slices that don’t. Example, the traditional smartphone industry growth may slow since everyone who wants a smartphone like iPhone or Android already has one. That means the smartphone sector and companies like Apple, Google and Samsung will continue to grow, but not as quickly.
There has been talk last week that Amazon could soon pass Apple as the most valuable company. Very interesting to think what could be coming. It’s all about growth.
I expect to see the wireless industry continue to grow and expand in several new and traditional ways. New technologies like 5G, new competitors and completely new segments empowered by the innovation wave being driven by companies like AT&T and Comcast.
However, that growth wave has changed time and time again over the last few decades and will continue to change. Traditional wireless is getting faster with 5G. This will unleash new growth engines like we have seen with companies like Uber and Lyft, which use wireless to reinvent the taxi and limousine space. The next question is simple… what’s coming next?
Whether you are an investor, worker, executive or customer, be careful to stick with the growing parts of the wireless industry. While wireless will continue to grow in general, different segments will pick up and other segments will slow down. So, it’s important to keep your eyes open for the real growth opportunities.