Fixed Wireless Access Integral in the Future of Connectivity

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By Dean Tan | 1Q 2022 | IN-6477

Mobile Network Operators are optimistic about fixed wireless access as one of the 5G killer applications and monetization avenues. And yet, Fixed Wireless Access is not something new to the industry and market. Having existed for many years, is this optimism from Mobile Network Operators unfounded?

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T-Mobile and Verizon Remain Optimistic for Fixed Wireless Access

NEWS


In the past week or two, Fixed Wireless Access (FWA) has once again come to the focus for Mobile Network Operators (MNOs). Verizon and T-Mobile US have both strategically placed 5G FWA either as the 5G killer application or one of the 5G monetization avenues in their presentations to the wider industry. Verizon expects to see an uptick of fixed wireless access customers in the range of four to five million by the end of 2025 while T-Mobile US is aiming to serve six to eight million FWA subscribers by 2025. Other mobile network operators such as TPG Telecom in the Asia-Pacific region also aims to increase its Fixed Wireless customer base to 160,000 by end 2022.

ABI Research forecasts that by 2026, the total 4G/LTE and 5G FWA subscriptions will amount to 178.4 million subscriptions. Of the 178.4 million subscriptions, 5G FWA subscriptions will make up about 38.5% of total by 2026 with the majority coming from the North America, Western Europe, and Asia-Pacific regions. 5G FWA subscription is also expected to see significant growth with a Compound Annual Growth Rate (CAGR) of 59.6% from 2022 to 2026.

Has Fixed Wireless Access Finally Found its Spot?

IMPACT


FWA has been around for quite some time but the advent of 5G changes the game significantly for FWA. Limitations in the average speed for LTE FWA has been one reason why wired solutions (e.g., fiber) were preferred. LTE FWA has average speed of up to about 100 Mbps (Megabits per second) while fiber can go up to 40 Gbps (Gigabits per second). Yet, with 5G FWA, the average speed increased by at least tenfold and range from 1 Gbps to 10 Gbps. There are good reasons for mobile network operators to expect an uptick in FWA adoptions globally.

  1. The first has to do with closing the digital divide and targeting customers who have been left behind. This is a key topic in both developed and developing markets, as affordability of broadband is one reason for the divide. In the United States, for example, the Federal Communications Commission (FCC) has been tackling the affordability issue through subsidies and more recently announced that ten million households have been enrolled into the Affordable Connectivity Program. Elsewhere, for example in Africa, where it is challenging geographically and not cost effective for wired solutions (e.g., copper or fiber) to be deployed, FWA can be the alternative. In Asia, Globe in Philippines have deployed FWA to help bring connectivity to remote areas with low Average Revenue Per User (ARPU).
  2. The second has to do with technological improvements due to 5G mmWave. Back in mid-2021, Ericsson, together with Qualcomm and US Cellular, achieved a record distance of 7 km using mmWave frequency. This increases the appeal and capability of FWA as a tangible solution over wired. It also allowed FWA to broaden its support for use cases requiring high capacity and overcome its initial barrier of limited coverage distance.
  3. The third is the effect connectivity and mobile broadband penetration has on global economies. It is known that connectivity is key to driving the inclusive economic growth and that starts with closing the digital divide. One study by World Bank in 2016 showed that a 10% increase in national broadband penetration increases Gross Domestic Products (GDP) by 1 to 2%. Another study by Ericsson and Imperial College (UK) showed that a 10% increase in mobile broadband penetration results in an increase in GDP by about 0.6% to 2.8%. Therefore, for government there is an incentive to ensure quality broadband across the bulk of the population and drive economic growth.
  4. Lastly, the degree of flexibility in FWA deployment where temporary connectivity services are required. For example, in the case of a disaster when the wired solutions have been damaged and destroyed or in the case of an annual event or festival. This will be a key driving force behind businesses’ adoption of FWA and where the usage of space evolves (e.g., a festival or outdoor concert held at a carpark). Additionally, during such events, new applications such as Extended Reality (XR) have surfaced with the advent of 5G, making connectivity crucial for the event’s success. FWA provides the necessary mobility for businesses to relocate when needed.

Fixed Wireless Access is Integral in the Future of Connectivity

RECOMMENDATIONS


If FWA is to play an integral role in the future of connectivity, what lessons and recommendations can we draw to better support affordable broadband in society? There are at least three key take aways for different parties:

Policy Formulation for Government Agencies

Government agencies must see FWA as one of the means to providing affordable broadband for its population. Public funding and policies must consider carefully where taxpayers money is used for and help achieve policy outcomes (e.g., in closing digital divide through subsidies). This is important especially when government expenditure creeps upward. Additionally, to deliver a gigabit society, policy makers need to also take in account the deployment challenges faced by mobile operators to ensure affordability of broadband and limits value extracting economic activities (e.g., excess rent charges to mobile operators).

Strategic Planning for Mobile Network Operators

Fixed Wireless Access has already been part of the strategic planning for mobile network operators but increasing so in the future. With 5G and the technological improvement in mmWave capabilities, FWA will be able to support more applications and deployment scenarios. As such, MNOs should take note of where FWA could substitute wired solutions and improve broadband coverage and capacity. This is crucial as MNOs could grow additional revenues from underserved customers or customers with limited options for their service provider.

Continuous Research and Development in mmWave’s Capabilities by Equipment Vendors

For the equipment vendors, there is a need to continue Research and Development (R&D) to improve mmWave capabilities. This is crucial in supporting the attractiveness and capabilities for FWA. A classic example is Qualcomm’s continued effort to innovate its 5G Fixed Wireless Access Platform with the release of its second generation product. It includes a reference design to speed up the 5G FWA devices commercialization process for manufacturers in a cost-effectively manner. These efforts will further bolster FWA’s capability and attractiveness as a solution.

While there are countries, such as South Korea and Japan, embedded with fiber optics, it does not necessarily mean it is the only way to achieve a gigabit society. With the advancement made in wireless communication technologies, FWA is increasingly a viable option to provide high-quality connectivity and affordable broadband for the consumers and enterprises.

 

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