2018 Preview: Fixed wireless will emerge as a proving ground for 5G

Verizon will deploy fixed-wireless 5G services in Sacramento, California, and a few other markets next year. (Pixabay)

Editor’s Note: This article is part of our 2018 Preview feature, which looks at the big topics facing the industry next year. Click here for the 2018 preview in wireless, cable and the wireline industry.

Fixed wireless became a focal point for some major carriers in a big way in 2017, and it could prove to be an important stepping stone on the path to 5G in 2018. But the question of whether service providers and carriers can leverage fixed wireless to actually generate significant profits still isn’t clear.

Fixed wireless services have been around for years, of course, but the use case is emerging as something of a proving ground for 5G business services, enabling wireless carriers, cable companies and others to perhaps link the “last mile” between businesses or residences and the core of the network without using fiber.

FREE DAILY NEWSLETTER

Like this story? Subscribe to FierceWireless!

The Wireless industry is an ever-changing world where big ideas come along daily. Our subscribers rely on FierceWireless as their must-read source for the latest news, analysis and data on this increasingly competitive marketplace. Sign up today to get wireless news and updates delivered to your inbox and read on the go.

Verizon is testing fixed 5G service in 11 markets around the country and recently announced that it had tapped Ericsson to provide networking equipment for a prestandard launch of commercial, fixed-wireless 5G in the second half of 2018. AT&T, which launched fixed wireless 5G tests earlier this year in Austin, Texas, recently launched its largest 5G fixed-wireless trial with Magnolia in Waco, Texas.

And it isn’t just the nation’s two biggest carriers that are betting on fixed wireless. Regional telecom C Spire in September outlined plans to launch fixed wireless in eight markets in Mississippi, with more to follow. Rise Broadband offers fixed LTE services alongside nonstandard fixed wireless options in rural locations across a sizable U.S. footprint, and a handful of potential upstarts such as Starry view fixed wireless as a way to disrupt both the wireless and fixed-line markets.

Businesses cases for fixed wireless aren’t necessarily very compelling, however, Dean Bubley of Disruptive Analysis wrote recently.

“Fixed-wireless broadband will be used in certain places—but despite the hype, obviously won’t displace fiber or cable at scale,” Bubley wrote on Medium. “Apart from anything else, 5G small cells will need fiber backhaul—and the other 100 or 1,000 fibers in the duct will be installed for other broadband users.”

Indeed, serious questions remain about the cost of deploying fixed-line 5G services. Verizon said its initial 5G residential broadband services could reach approximately 30 million households nationwide, but Jonathan Chaplin of New Street Research said the carrier is “making bold assumptions” about the capabilities of technologies it hopes to leverage to reach consumers in their homes.

“Bottom line: until they admit to the capex and opex costs associated with a serious deployment I think the market should be skeptical,” Chaplin wrote last month in a research note. “The trials were compelling enough to warrant small commercial deployments. Google Fiber was here once upon a time, and much more was known about the cost of deployment and the capabilities of the network—and it still died. It looks like we won’t know how committed Verizon is to this or how much of a threat it will be until this time next year. Until then we remain skeptical.”

If fixed-wireless 5G services prove profitable in 2018 and beyond, the lines between the wireless industry and the traditional cable market could blur further, enabling increased competition that would ultimately benefit consumers. If they don’t pan out as hoped, though, the path to the broader world of 5G could be bumpier than some carriers envision.