Understanding the business case for 5G Fixed Wireless Access (FWA) requires a holistic view of the wider market and adopting strategies that will make the technology more accessible. Mobile Network Operators (MNOs), such as Verizon, T-Mobile, and AT&T, are increasingly ramping up their 5G FWA ambitions
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- 5G Fixed Wireless Access (FWA) network infrastructure will mature in 2 to 3 years.
- There are currently 120 5G FWA Customer Premises Equipment (CPE) devices commercially available, indicating a healthy market.
- 5G FWA, with the support of advanced antenna technologies like Massive Multiple Input, Multiple Output (mMIMO), beamforming, and beam tracking enables Mobile Network Operators (MNOs) to deliver improved Quality of Service (QoS), higher speeds, and unlimited data.
- The FWA market will find itself competing with wired connections due to convenience and cost-friendliness.
- Every region is witnessing growth in the 5G FWA market, with subscriptions increasing from 39 million in 2021 to 58 million by 2026.
- Western Europe is the largest regional market, with 17.6 million 5G FWA subscriptions expected by 2026. Its Eastern European counterpart will experience more humble growth—from 250,000 subscriptions in 2021 to 6.7 million by 2026.
- 5G FWA subscriptions will also be strong in Asia-Pacific and North America—16 million and 12.7 million, respectively, by 2026.
- For the Rest of the World (RoW), 5G FWA subscriptions will indeed grow, albeit on a much smaller scale.
- In the United States, major operators like Verizon, T-Mobile, AT&T, and UScellular are making the country a hotbed for 5G FWA connections. While Verizon and AT&T target enterprises, T-Mobile and UScellular target both residential and business customers.
- Verizon’s 5G Business Internet via C-band 5G FWA covers 2 million businesses in 900 cities. Meanwhile, T-Mobile allied itself with Cradlepoint to support its enterprise 5G FWA efforts and announced in April 2022 that 40 million American households are eligible for 5G FWA Internet. In July 2022, Mediacom Communications, one of the largest U.S. cable operators, partnered with Samsung to provide Internet service to hard-to-reach communities via FWA.
- Breaking down the worldwide 5G FWA market by technology standard, legacy connection generations (3G/4G) will find their way into the majority of deployments, with Millimeter Wave (mmWave) only being deployed in high-traffic locations.
“Europe, Asia-Pacific, and the Middle East are driving the number of 5G FWA services, while the United States is driving the number of 5G FWA connections with major operators, such as Verizon and T-Mobile, aggressively expanding their FWA services.” – Fei Liu, Industry Analyst at ABI Research
Key Decision Items
Governments Should Include 5G FWA in National Policy
To close the digital divide, governments and regulators should view the FWA market as a key solution. One of the primary benefits of FWA is that it has a faster time to market than fiber, meaning swifter user uptake. After operators conduct proper market assessments on 5G FWA spectrum capacity needs, governments need to work closely with them so that 5G FWA deployments scale. In many cases, governments will have to strike agreements with MNOs in a way that allocates spectrum to communities that are difficult to access. In turn, this will make the business case for 5G FWA more obvious.
Governing bodies of regions that have low penetration of fixed broadband should incorporate 5G FWA into their national strategies to meet connectivity goals. In places like the Philippines, a country with more than 7,000 islands, or rural Australia, where small farms and villages often lack reliable broadband, 5G FWA makes more sense than fiber-optic networks. Still, other regions, such as India, have enormous rural populations with very low fixed broadband service adoption for households, making the country ripe for 5G FWA use cases.
Finally, in countries where MNOs are primarily focused on Fiber to the Home (FTTH), there’s still a solid business case for 5G FWA in a wide range of applications, for everything from music concerts to cruise liners. Moreover, FWA is also a good match for users who are highly mobile or move around often, as young people in Japan often do.
Governments and Regulators Need to Galvanize MNOs
There are two forces are working against the expansion of the 5G FWA market. First, FWA is routinely deprecated because FWA subscribers consume 40X more network resources than mobile subscribers. Second, Average Revenue Per User (APRU) advantages over mobile subscribers typically do not exist. With these two points making the 5G FWA business case less than ideal for many mobile operators, governments and regulators should do everything in their respective powers to remove friction for MNOs. This could translate to less regulatory pressure for FWA networks, broader spectrum allocation, and lending financial assistance to encourage greater focus on FWA business opportunities, notably for rural and remote areas.
Equipment Vendors Can Widen the 5G FWA Market Opportunity by Ramping up Commercialization
The four types of CPE available on the 5G FWA market are indoor sub-6 Gigahertz (GHz) CPE, outdoor sub-6 GHz CPE, indoor mmWave CPE, and outdoor mmWave CPE. Equipment vendors, none of which account for any more than 6% of the market share, more than doubled the number of commercially available CPE devices since June 2021. The majority of these devices are indoor CPE because it’s a preference among MNOs.
While the average cost of 5G FWA CPE has fallen to less than US$200, this price is still prohibitive in less developed regions. To reduce the cost of 5G FWA CPE devices even further, vendors need to continue accelerating product rollouts and commercialization. As market proliferation will drive prices down, new customer bases and use cases will be attainable.
Operators with Excess Network Capacity Should See the Business Case for 5G FWA
For MNOs, 5G FWA is a valuable business opportunity that can generate additional revenue streams. FWA is poised to be the first successful use case for the 5G market and most network operators already have the adequate network capacity to support 5G FWA. Putting surplus network capacity to good use via 5G FWA deployment demonstrates a clear business case for MNOs in the short term when capacity limitations are not as much of a concern.
However, ARPU for FWA is, similar to mobile subscriptions, rather low. For the 5G FWA market to thrive indefinitely, operators must possess significantly more spectrum to accommodate more consumers. If the investment is justified in enough additional subscribers, MNOs will have to support more mid-band spectrum or mmWave in some areas. While 6 GHz could represent a budget-friendly way to meet demand, it might not be until after 2025 that the infrastructure and devices are available at scale. Finally, as will be explored in more detail in the next section, network resource optimization is going to be crucial in the 5G FWA market.
The 5G FWA Market Must Plan for Network Resource Optimization
One of the drawbacks of FWA is that subscribers share the same network capacity as mobile subscribers, putting further strain on the network. Making things worse, FWA subscribers, on average, use 400+ Gigabytes (GB) of data per month, compared to 10 GB to 12 GB for mobile subscribers. To make the 5G FWA business case viable for the long haul, operators must find a way to allow FWA and mobile subscribers to co-exist without sacrificing Quality of Service (QoS) and user experience for either use case. Enter Artificial Intelligence (AI) techniques, such as Machine Learning (ML). These technologies can provide rich insight pertaining to network quality and user experience by leveraging the following data:
- Traffic growth
- Key Performance Indicators (KPIs)
An application of AI-based solutions helps operators be more efficient with available network resources. This, in tandem with in-depth planning, will ensure that MNOs are building a successful business case for 5G FWA.
CPE vendors could also play a key role in helping MNOs optimize network resources. Solutions that discover network congestion, observe CPE issues in a timely fashion, and provide auxiliary analysis are a few examples of how CPE players could support operator resource allocation and ensure that 5G FWA’s business case remains practical.
Key Market Players to Watch
- Asiatelco Technologies
- Casa Systems, Inc.
- Green Packet
- Jaton Technology
- MediaTek Inc
- Qualcomm Inc
- ZTE Corporation
Dig Deeper for the Full Picture
Understand more about the business case for 5G FWA—including opportunities and challenges, how deployments should be carried out, and what the deployment status is in each region—by downloading ABI Research’s 5G FWA research report.
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This content is part of the company’s 5G & Mobile Network Infrastructure Research Service.