Fixed Wireless Access (FWA) is rapidly gaining momentum across the mobile ecosystem as a scalable alternative for fixed broadband. FWA is not a new technology per se but this “third wave” of FWA is likely to be a success. The near-term trigger for success is the impending large-scale launch of 5G networks in the U.S. and across multiple countries around the world, and FWA has emerged as one of the leading use cases for 5G NR architecture.
A recent report by Counterpoint Research forecasts that FWA will rise from a 4% share of the consumer broadband market today to account for nearly a third of the overall household broadband market by 2030, which is close to half a billion FWA home subscribers. 5G will account to close to 90% of these FWA subscriptions by 2030.
There are several drivers for the momentum behind FWA globally.
The first and most fundamental is that there is tremendous room for growth in fixed broadband around the world. While fiber to the home has received a lot of attention in recent years, less than half of households around the world currently have access to fixed broadband. If we remove China and the U.S., two countries with significant fixed broadband penetration through fiber, cable and copper technologies, the rest of the world would boast a mere 28% penetration. Emerging markets have little fixed broadband outside of urban and suburban areas, indicating significant room for growth.
The so-called Next Billion segment represents a large, untapped opportunity not just in emerging markets like India, Indonesia and Brazil but also a significant number in developed economies like the U.S., Australia and others that have significant rural populations without fixed broadband access.
Governments around the world are beginning to take cognizance of this continuing “digital divide” and are framing policies and providing financial support to push this agenda, with FWA becoming an important part of the toolkit to achieve these goals.
Moreover, adoption of FWA will also be boosted by meaningful drops in the prices of customer premise equipment (CPE) by the end of 2020 coupled with potential subsidies from service providers.
In recent months, Covid-19 has demonstrated the need for fast and stable consumer broadband access beyond smartphones. The global impact of the pandemic has crystallized the need for broadband in the minds of consumers and even governments, lending a new-found urgency to universal broadband policies. A case in point is the recent proposal by the FCC in the United States to allocate $9 billion toward rural broadband.
Finally, another driver for FWA is the large amounts of new spectrum that governments are making available for deployments of 5G. New spectrum is available not only from newly cleared frequencies in the higher mmWave bands but also from lower bands like 700 MHz that are being made available in some markets. The higher mmWave bands also have the added benefit of wide channel sizes, which will enable much higher capacities for broadband.
New market segments for FWA
FWA has long been positioned as merely a cost-effective alternative to fixed broadband alternatives like fiber and DSL, especially for the Next Billion segment. However, new market segments are emerging for FWA, with service providers looking at deploying FWA for different strategic compulsions and competitive environments, depending on whether they are pure-play or integrated, market leader, or challenger.
FWA is emerging as a great use case for a targeted 5G launch.
Several service providers around the world have already deployed FWA in a significant manner, but these have been on LTE networks, with most spread across emerging markets like the Philippines and Sri Lanka. These operators are looking to upgrade these subscribers to 5G, but several are also looking at FWA to help them build a viable business case for 5G. Targeted launches across coverage areas will ease pressure on service providers to do a big-bang launch and incur a lot of Capex, which will be tough to justify under the current post-pandemic environment.
FWA is also becoming a very appealing technology for service providers to integrate offerings across both fixed and mobile. Most providers will only deploy fiber to the most economical point, but this still leaves plenty of gaps, making 5G FWA an excellent and complementary solution. FWA is also a very compelling solution for those challenger service providers who are targeting entry into the fixed broadband market. Carriers like Verizon in the U.S. and NBN in Australia have used FWA to offer fixed broadband in areas where they are not licensed or have very little infrastructure.
Future outlook for FWA
The FWA market is finally on the verge of achieving significant traction and consumer spending. The ecosystem for FWA is growing at a rapid clip, with new players from across the spectrum announcing plans, products, and partnerships. Component and module players led by the likes of Qualcomm are working with hardware companies like Nokia, Huawei and Oppo to make FWA CPE devices for the service provider opportunity led by the likes of Verizon, Optus and others.
As FWA momentum picks up from late 2020 onward due to the availability of more ‘affordable’ CPEs, service providers will tend to focus on the home broadband opportunity in the short term.
However, there will be other areas of growth and new segments for providers, particularly within the enterprise segment. For example, service providers will start to focus on demand in the small and medium business segment, retail and other premises that are currently very hard to serve with fiber. Rising attach rates for Wi-Fi 6 will also boost adoption in the enterprise segment and in some cases, FWA could potentially become a "substitute" for small cell deployments. All in all, this is a segment worth keeping close tabs on as we get closer to 2021.
Shiv Putcha is the Founder and Principal Analyst at Mandala Insights, an independent, boutique analyst firm that offers insights, opinions and research on the network and emerging technologies that will drive the next billion digital opportunities in Asia. Shiv is also keenly focused on the intersection of rising enterprise productivity, Industry 4.0 and 5G. Prior to founding Mandala, Shiv covered the telecommunications industry in Asia-Pacific for IDC and Ovum, along with stints at the Yankee Group, Qualcomm and LogicaCMG while based in the United States.
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