Whether FWA Is Capacity-limited a Key Question for Broadband: New Street
Determining whether fixed wireless access is capacity-limited is “perhaps the most critical question hanging over the mobile and broadband sector in the US,” New Street’s Jonathan Chaplin said in a Monday note to investors. “If capacity is limited at 10-20%,…
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then 80-90% of the broadband market remains a duopoly, with pricing power and high returns on invested capital, and assets will ultimately trade at higher multiples,” Chaplin wrote: If capacity isn’t limited “the broadband market is as competitive as wireless with no pricing power, and broadband assets deserve to trade at the 6-7x that they are trading at today. Cable subscriber growth won’t recover anytime soon, and some investments in fiber that are predicated on high and rising ARPU may prove to be a bust.”