Growing Market Pain
With the convergence of consumer demand for viewing more streaming content on mobile devices and ever-increasing 5G bandwidth delivering that content with higher data loads, paying for data costs continues to eat more and more into operators’ bottom lines. Recent reports further illustrate this storm:
- Growth in mobile data traffic per smartphone can be attributed to three main drivers: device capabilities, increase in data-intensive content, and continued performance improvements of networks. [Ericsson Mobility Report Nov 2021, p20]
- Mobile network data traffic grew 42% between Q3 2020-21. Over the long term, traffic growth is fueled primarily by more viewing of streaming content. [Ericsson Mobility Report Nov 2021, p19]
- Mobile data traffic will grow at a Compound Annual Growth Rate (CAGR) of 46 percent from 2017 to 2022, reaching 77.5 exabytes per month by 2022. [Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2017-2022]
As more people consume increasing amounts of data-intensive content and machine-to-machine communications add even more demands on wireless transmission, the following problems arise for mobile network operators and consumers of satellite data:
- Despite maturity in mobile technologies, costs from increasing data usage unfavorably impact regional MNOs and MVNO profitability resulting in a reactive operating environment
- Thin margins, subscriber churn and retention, strategic differentiation, competitive pressures, and market growth are daily concerns
- MVNOs are retail sales companies in a cannibalistic space and lack strategic expertise or capital, and they have no network infrastructure which limits their ability to address oppressive profitability constraints associated with their rising cellular data costs
- Regional MNOs have limited capital for expensive upgrades to their cellular networks and may lag in strategic expertise; however, they are collaborative and always looking for cost-effective solutions
CORA benefits our customers in multiple ways as 5G and LEO roll out.
Our 5G advisory team believes the impact of this technology in our market segments will increase roaming data consumption and further enhance the value proposition of CORA.
- 5G is focused on urban areas and our focus groups do not consider 5G as having any positive benefit to their business shortly, in fact, see 5G as potentially greater pressure on their operating costs due to increased data consumption
- 5G will increase data usage by the device due to greater bandwidth
- CORA potential customers are operators that cover roaming costs for their subscribers, costs their subscribers are protected from. So subscribers that roam on Verizon or AT&T 5G will cause greater pain for our customers, making CORA an even more attractive value proposition
- Right now, a new broadband internet is being launched – literally. SpaceX Starlink, Amazon, and Google have all been approved to launch thousands of LEO satellites over the next six years. These tiny LEO satellites will provide faster, more secure broadband communications to the world – especially the remote parts of the globe. These emerging LEO satellite “constellations” will undoubtedly disrupt the Internet market as we know it. Similar to the current mobile market, where three big carriers (Verizon, AT&T, T-Mobile/Sprint) resell cellular data and voice access to the MVNO and MNO mobile operators, we expect to see an explosion of LEO “MNOs and MVNOs” reselling this satellite data to consumers from the new big carriers: SpaceX Starlink, Amazon, and Google. Now more subscribers will have access to high-speed broadband internet even in remote locations where access has been unreliable, expensive, or completely unavailable. Data consumption will continue to grow exponentially, and the hundreds of companies worldwide that sell access to LEO satellite data will be faced with the same high data costs. Fortunately, CORA is extremely well-positioned to service this promising high-growth market.