Fixed wireless access (FWA) is poised to narrow the digital divide by providing a broadband option for consumers — especially in rural and underserved areas — through the rapid and efficient deployment of 5G technologies. To fully understand FWA’s impact on the competitive dynamics of the wireless service provider community, it is instructive to take a look at the events that unfolded from 2020 through the first three quarters of 2021.
The market witnessed record low churn rates for wireless mobile network operators (MNOs) as the industry absorbed the rapid emergence and deployment of 5G technology. Consumers have rewarded MNOs that provided reliable access to the internet for work, education and entertainment through the pandemic with almost stubborn loyalty. With customer bonds thus forged, a critical question now faces the wireless service provider community: Where will new growth come from?
FWA is emerging as a central element of the answer.
While FWA has been a factor in the delivery of broadband services to the home for some years now, the rapid development and deployment of 5G technology has introduced a viable alternative to the terrestrial offerings that have dominated the delivery of high-bandwidth internet access to the home in most markets.
This is changing the competitive dynamics in meaningful ways. Up to this point, wireless providers haven't necessarily competed with hardwire service providers. They have, in fact, often been customers of one another. Current multichannel video programming distributors — the cable operators that also run mobile virtual networks (MVNOs) — frequently rent network access from wireless service providers.
Most residential and business customers have had limited broadband access choices for internet service with access to a relatively narrow list of local telcos (that offer fiber access) and cable operators (for coaxial broadband services). With new options, subscribers can decide who provides the best value for bandwidth in terms of cost and performance.
Choice will be especially compelling as the country adjusts to the post-pandemic demographic shift that is underway as work-from-home (WFH) practices become mainstream, abstracting the relationship between where people live and what they do for a living. Many consumers are relocating from expensive and dense urban areas to less populated and less costly communities. The regions absorbing new population inflows will have to create infrastructure to support them. This is where FWA creates some interesting opportunities.
While terrestrial infrastructures offer terrific bandwidth, they are expensive and cumbersome to deploy. Providing connectivity requires roads — and other rights of way — to be dug up so that wires can be buried and then physically connected to people’s homes. FWA technologies, by contrast, can be deployed with less disruption to offer near-gigabit broadband access speeds.
Commoditization of bandwidth puts premium on customer care
In a saturated mobile wireless service provider market, fixed wireless will play a vital role in the ability of MNOs to grow by tapping into a new pool of customers in their homes. As 5G FWA providers make their case to consumers on the speed and reliability of their broadband access services, they will be incentivized to focus on more than bandwidth, which is increasingly becoming a commodity, and move the battle for the hearts and minds of subscribers to quality of customer care.
This is a front on which wireless service providers have quite a bit going for them. Measured across different industry segments, MNOs are clear leaders and innovators in offering outstanding customer care experiences. The segment also knows how to deal with volume and complexity. Given the national footprint of their offerings, wireless operators have experience managing far more accounts than cable and telco providers.
It would be a mistake, however, to ignore the fact that traditional wireline ISP operators have a strong embedded position and presence in the broadband access market. They have an established reputation for offering reliable video programming and a wide variety of options and will obviously respond aggressively to FWA competition.
There is a potential wildcard in the mix. Elon Musk’s Starlink low earth orbit (LEO) satellite service could play a game-changing role in offering alternative access to broadband services in the home. With close to 2,000 LEO satellites already launched, Starlink offers a compelling connectivity option. That said, with download speeds of between 100 and 200 megabits-per-second and latency in the 20-millisecond range, Starlink does not compare favorably with the near gigabit and multi-gigabit offerings of terrestrial and emerging FWA services.
While no one can be sure of how the competition will play out, one thing is certain: consumers will emerge as the big winners as the fight unfolds. They will receive more for their money and very likely an uptick in the quality of care.
Ian Greenblatt leads J.D. Power’s Technology, Media and Telecommunications Intelligence. With in-depth industry expertise, Ian drives market strategy across the rapidly converging landscape, which encompasses the entire communication sector. He is a graduate of Northwestern University and DePaul University College of Law. You can reach him by email at [email protected] and follow him on Twitter at @GreenblattTMT.
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.