The three big wireless operators – AT&T, T-Mobile and Verizon – are pouring billions of dollars into building their 5G networks and are now eying the home broadband market as being ripe for disruption. And what better way to use these new supercharged 5G networks than to deliver wireless broadband to underserved or unserved markets.
But the analysts I spoke with don’t think that existing broadband providers should be too concerned about losing customers to these 5G FWA services. There are too many obstacles that need to be overcome, particularly related to installation and coverage, for FWA to be much of a threat. “I think Verizon and T-Mobile can snag some cable customers, but they are not going to bring the cable industry to its knees anytime soon,” said Tammy Parker, senior analyst with GlobalData.
Of the three big operators, T-Mobile and Verizon have really taken the lead when it comes to their 5G FWA offerings while AT&T has remained on the sidelines for now. AT&T has a 4G LTE FWA offering but it’s primarily limited to rural markets.
During T-Mobile’s recent analyst meeting, the company estimated that the home broadband market is a $90 billion business annually and that it could capture about 20% of that market in the next five years. T-Mobile, which has racked up about 100,000 FWA customers during its months-long FWA trial, even said they thought they could capture between 7 million to 8 million customers by 2025.
Verizon, meanwhile, has been commercially selling its 5G Home fixed wireless service since 2019. The company now offers 5G Home in more than 30 markets but so far, the operator hasn’t provided any guidance about the number of customers it has for the service. Nevertheless, Verizon has said it cover one to two million households with mmWave by the end of 2021.
A needle in a haystack
Verizon and T-Mobile’s 5G FWA subscriber goals may be doable, but it isn’t going to be easy. I recently tried to get Verizon’s 5G Home service at my Denver home. Although Verizon’s website said my address was in the company’s 5G Home coverage area, I was told by a Verizon customer service representative that they had no way of knowing for sure if I would have adequate coverage until the 5G Home router was installed in my house. If it didn’t work, I’d have to return the router (but wouldn’t be charged a re-stocking fee, of course). When I asked a Verizon spokesperson whether this was true for every potential 5G Home customer, he said that coverage is based upon individual address qualifications.
Parker says my experience with FWA isn't unusual. “One of the biggest issues right now is availability,” she said. “As you’ve already discovered, finding out whether you can get fixed wireless internet service from T-Mobile or Verizon in a major city or a rural area is like searching for a needle in a haystack.”
And if you do happen to live in an area where FWA is available and the signal is strong, you then have to navigate the installation process. In my case, Verizon offered a free installation from a skilled technician but warned me that it could take several hours. Verizon does have a self-install option, and a spokesperson said that self install is available in every 5G Home market.
Shiv Putcha, founder and principal analyst with Mandalay Insights, isn’t a fan of the self-install model and thinks operators shouldn’t leave it to consumers to figure out the installation. “This is especially true in a situation where you don’t have blanket coverage,” he said, adding that he expects Verizon will see a lot of returned routers because consumers can’t properly install them and find adequate coverage.
Parker, however, notes that Verizon has said that 70% of its customers that request a 5G Home self-install kit are successful at doing it. She adds that this is an impressive number considering consumers have to install a receiver on the window where the best reception in the home is detected and then connect it to the router.
T-Mobile is also attempting the self-install method for its FWA. I do not know if T-Mobile’s self-install process is any easier than Verizon’s but it does appear the company is more focused on the customer service aspect. T-Mobile recently announced plans to hire 7,500 “hometown experts” in rural communities over the next two years. These jobs will provide additional sales and support, particularly in small towns where T-Mobile doesn’t necessarily have a large retail presence.
Parker, however, notes that cable operators have been doing this type of on-the-ground sales for some time by sending folks out in neighborhoods to go door-to-door or attend community events to introduce the company’s latest services and offerings.
She said that the hiring of these 7,500 experts could be a good move for T-Mobile but also said that the sales cycle for this is long. And she even recommended that Verizon take a “wait-and-see” approach before hiring local reps like T-Mobile. She said they should first determine whether T-Mobile’s hires actually contribute to its FWA success.
FWA may be a strong contender in markets where broadband is lacking or where there is little competition among broadband players. But in cities like Denver where reliable broadband is pretty pervasive, Verizon and T-Mobile are going to have to improve their 5G coverage and streamline their installation process to be true challengers to cable.
Note: This article was updated with Verizon's year-end 2021 goal of covering one to two million homes with mmWave.