Wave7 Research has been highly skeptical about 5G, which we consider to be overhyped. Fixed wireless for home and business broadband is a completely different matter, and we have initiated coverage of the sector.
Why now? The main reason is the movement of the national carriers – and especially of T-Mobile – in the direction of selling wireless home internet. T-Mobile pledged that if its acquisition of Sprint were approved, it would make wireless home internet available in more than half of U.S. zip codes by 2024. Game on.
I’m not simply talking about T-Mobile’s statement. Sprint had a mother-lode of 2.5 GHz spectrum, which was long underutilized due to a lack of capital. Once this spectrum is heavily deployed with 5G and combined with T-Mobile’s existing assets, then speeds and capacity will be tremendous. T-Mobile is already in select areas pitching LTE-based internet at $50/month with no data caps and no annual contracts.
For home internet, the issue is not speed. LTE speeds are already fine for home Internet. The issue is capacity, which Sprint’s 2.5 GHz spectrum provides. Spectral capacity is a finite resource. Because landline broadband scales better, it will continue to dominate in densely populated markets such as New York and Chicago. T-Mobile understands this and likely will focus its fixed wireless internet push in areas with lower population density, including rural areas, as mobile performance will be impacted less.
Verizon executives have set a goal of making 5G Home available to 30 million homes in the next five to seven years.
AT&T is doing more than meets the eye. This year, fixed wireless will be available to 1.1 million locations in 18 states. AT&T on March 31 announced that it had won mmWave spectrum covering 99% of the U.S. and stated that following an initial focus on mobile services, “fixed service may follow.” AT&T is adding fixed wireless equipment to some of its macro towers. For example, the carrier in January announced that of the 89 new macro towers built in Kentucky during 2019, most had “equipment to enable fixed wireless internet service.”
Historically, fixed wireless has had a reputation – deservedly so – of being basically a rural service. According to a November 2019 report in Multichannel News, there are more than 2,100 wireless internet service providers (WISPs) in the U.S. Research indicates that overwhelmingly, these are small providers that focus mostly on rural areas, where cable service and ILEC fiber may be subpar or unavailable.
FWA use cases
However, other business models are emerging that suggest that fixed wireless could gain share even in urban markets. Starry Internet, an urban WISP, has amassed $350 million in capital, hoping to win share in the multiple dwelling unit (MDU) market, using mmWave spectrum. Sure, mmWave signals have horrible penetration and propagation. However, a line-of-sight signal is beamed to a rooftop antenna, with the signal distributed via MDUs’ internal wiring.
Other companies are making similar efforts. Wander is a California WISP that has 200-plus “building partners” and is planning an expansion to Los Angeles. Common Networks, a California 5G WISP, has amassed $34 million in funding and plans to pursue single-family homes and suburban areas. The WISP is planning a 1 Gbps tier of service for later this year.
The Microsoft Airband Initiative is intended to make broadband available to three million people in “underserved rural areas” by mid-2022. The tech company is partnering with rural WISPs such as Wisper ISP for rollouts, and this WISP has received $220 million in federal funding for a fixed wireless buildout in rural Missouri.
Shentel, a Sprint affiliate across parts of the mid-Atlantic, recently indicated plans to make fixed wireless available to 300,000 households in its operating areas this year, using 2.5 GHz spectrum.
Finally, there are the satellite players. Services of HughesNet and Viasat are available wherever there is a view of the southern sky. Ambitious projects for broadband-related satellite constellations are in the works, including Amazon’s Project Kuiper, SpaceX’s Starlink effort, and the OneWeb constellation. OneWeb has 70 satellites in orbit, but recently filed for bankruptcy.
What does this all mean? Landline internet is essentially a duopoly of the cable companies and the ILECs. Just as the cable companies make rapid gains in the wireless market, they will be on the defensive on two levels. First, customers could choose one of these new wireless options for service. Second, generationally, customers care decreasingly about linear television. A strong T-Mobile signal bundled with Netflix or a strong Verizon wireless signal bundled with Disney+ might be enough to lure younger customers. And let us not forget about T-Mobile’s nascent TVision video service, which so far is sold in a few top markets, but is not available nationwide.
The increased competition will be a good thing for consumers and businesses, as there will be more options. And it will be great for telecom analysts, as we sort out increasingly complicated competition.
Jeff Moore is Principal of Wave 7 Research, a wireless research firm that covers U.S. postpaid, prepaid, and smartphone competition. Jeff has 25 years of telecom industry experience, including 13 years of competitive intelligence work for Sprint. Follow him on Twitter @wave7jeff.
Industry Voices are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by FierceWireless staff. They do not represent the opinions of FierceWireless.