Report: Fixed wireless 5G could reach $1B in revenues by the end of 2019

When it comes to the last mile, it's clear that using fixed wireless access (FWA) to hook homes and businesses up to broadband costs less than traditional connections. While a lack of a business case for operators has traditionally held back the FWA market, all that is about to change with 5G, according to analysts.

SNS Research estimated that the initial cost of establishing last-mile connectivity for can be reduced by as much as 40% in comparison to FTTP. And on the other side of the margin model, the first estimates that service revenue associated with 5G-based FWA subscriptions will reach $1 billion by the end of 2019.

Even better, the market is further expected to grow at a CAGR of approximately 84% between 2019 and 2025, eventually accounting for more than $40 billion. In other words, operators can look forward to boosted margins—all while significantly accelerating rollout times by eliminating the need to lay cables.

“Fixed wireless access has emerged as one of the most predominant use cases for early 5G network rollouts,” the firm said in its report on the subject. “Multiple mobile operators and service providers are initially seeking to capitalize on 5G as a fixed wireless alternative to deliver last-mile connectivity—at multihundred megabit and Gigabit speeds—in areas with insufficient fiber holdings.”

FWA has been around for years of course—and has always failed to gain significant market traction (i.e., WiMAX and Clearwire). However, principal analyst of wireless infrastructure for Ovum, Daryl Schoolar, said that the sheer scale of the players could be what’s different this time, bringing to fruition SNS’ forecasts. The first standardized deployments of 5G-based FWA are expected to be commercialized as early as 2019, and a number of rural carriers—including C Spire and U.S. Cellular—are beginning to view 5G as a means to deliver last-mile broadband connectivity to underserved rural communities.

However, crucially, there will also be significant early commercial rollouts by Verizon Communications and AT&T in the United States. Both are looking to deploy FWA using 5G in cities and urban areas that one would normally expect them to place FTTP, Schoolar said.

“In the past, FWA was either being deployed by smaller operators with limited resources or deployed by major operators in very selected markets,” he wrote in FierceWireless. “Those markets for the most parts were areas not covered by any type of fixed broadband and often rural and sparsely populated. FWA was only used in cases where other options didn’t make sense. AT&T and Verizon seem to be taking a different approach this time, at least when it comes to 5G.”

At the same time, Google is also part of this, given its acquisition of Webpass.

“This change in use case matters,” Schoolar said. “It creates a much bigger market for network and CPE solutions. Rural is a niche market with low volumes. Going after bigger markets for FWA will create more service demand, increase broadband competition, spur innovation and help drive down cost of the network and CPE. All of those things will be key in sustaining FWA.”

As for the spectrum aspect of the rollouts, SNS noted that the 28 GHz frequency band is widely preferred for early 5G-based FWA deployments, as many vendors have already developed 28 GHz-capable equipment—driven by demands for early field trials in multiple markets including the United States and South Korea.

Furthermore, “millimeter wave wireless connectivity specialists are well-positioned to capitalize on the growing demand for 5G-based FWA,” SNS said. “However, in order to compete effectively against existing mobile infrastructure giants, they will need to closely align their multigigabit capacity FWA solutions with 3GPP specifications.”