FWA: Boom or bust for U.S. wireless carriers?

Verizon sign
The big question remains: Can operators earn a decent return on their FWA investments? (Fierce Wireless)

A week ago, Qualcomm announced more than 30 OEMs are lined up to use its Snapdragon system for commercial fixed wireless access (FWA) launches starting in 2020, setting the stage for a full-court press on FWA in coming months.

That comes as Verizon is relaunching on a broader scale its 5G Home service, which it started offering in four markets just over a year ago, and today announced is landing in parts of Chicago.

The company, which reports fourth-quarter results this Friday, has said at various investor events throughout the year that it has learned deployment lessons from its early FWA launch, and wants to deliver home broadband in a whole new way, including with self-install and fast set-up.

Rival AT&T has said fixed wireless is one of the first go-to-market strategies for Citizens Broadband Radio Service (CBRS) spectrum at 3.5 GHz, while T-Mobile is promising a unique home broadband product to rival cable operators if its merger with Sprint survives a court challenge. T-Mobile launched an invitation-only pilot earlier this year targeting 50,000 homes.

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So, is this a new dawn for FWA, a service that has been the subject of so many earlier iterations that failed? Short answer: It depends who you talk to. Even shorter answer: Maybe.

Earlier this year, MoffettNathanson published a report for investors explaining how it undertook an in-depth analysis of Verizon’s fixed wireless rollout in Sacramento, California. “At the end of the day, what matters isn’t whether Verizon can make its fixed wireless broadband work—of course they can—it’s whether they can earn a passable return on their investment doing so,” the report stated. 

After exhaustive proprietary research and crunching the available numbers, the investment analyst firm concluded that given thus far limited coverage and low penetration, earning an attractive return will be challenging, at best, for Verizon.

Still, there are believers, and Verizon at last check hasn’t backed off its desire to hit 30 million homes with fixed broadband, although the timeframe for that isn’t crystal clear. Executives also make a point of noting that it’s one 5G network, not two separate ones, that will be delivering both fixed and mobile services, suggesting better economics than prior attempts by other entities.

New dawn?

Roger Entner, founder of Recon Analytics, said he doesn’t believe FWA will be dramatically different this time around, but concedes maybe a little bit. “This is not the new dawn of fixed broadband wireless,” he said.

Newer technologies like CBRS make a lot of sense in some instances, especially where the General Authorized Access (GAA) unlicensed portion comes into play.

“I am bullish, but I’m not irrational. I don’t have irrational exuberance,” he said. “We will have more fixed wireless broadband, undoubtedly. A lot more. But not like the world will change. They will do it where it makes sense.”

RELATED: T-Mobile launches fixed wireless broadband service pilot for 50,000 homes

Bill Ho, principal at 556 Ventures, said carriers like Verizon and AT&T for some time have been telegraphing that FWA is a growth area, one where they can derive future new revenue. He is bullish on the fact that wireless carriers can use millimeter wave (mmWave) to take customers away from cable. Again, if the 5G network is both fixed and mobile, they can choose where they want to go and compete with the various entrenched players.

That said, every generation of wireless has tried fixed wireless and they haven’t succeeded, not for technology but for economic reasons, noted Chetan Sharma, founder and CEO of Chetan Sharma Consulting. 

On the cost structure, “I don’t think we’ve cracked the nut on that yet,” he said.

That doesn’t mean it can’t be done, but it has to be able to scale in a large geographic market like the U.S. Ironically, Sprint in the U.S. is probably best positioned to offer a fixed service from a pure spectrum point of view; it has all that 2.5 GHz spectrum from the Clearwire (more irony) acquisition.

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From an enterprise standpoint, AT&T is probably the best positioned because it is the most mature operator in that space, and that will come in handy penetrating private networks for factories, campuses and the like, according to Sharma. On Verizon, “the jury is still out,” he said. It’s been the most aggressive in this market, but it’s so limited to certain areas and cities that it’s still early days.

One segment of the industry that has made a successful run at FWA are the Wireless Internet Service Providers (WISPs) that cater to areas where the big wireless carriers are not offering a fixed solution. So, are the members of the Wireless Internet Service Providers Association (WISPA) worried about new competition in FWA from the big operators?

“WISPA members are excited that the largest players in the industry are validating what they have known for decades: fixed wireless works to deliver high-speed competitive broadband in both urban and rural areas,” said WISPA President and CEO Claude Aiken in a statement provided to FierceWirelessTech. “Whether larger carriers enter rural fixed wireless market is up to them, and they will no doubt encounter challenges. Part of what differentiates our members is their community-first focus and their industry-leading customer service: affordable, uncapped, high-quality broadband offered by a local company creating rural jobs.”

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It's a good bet that the industry will hear a lot more about FWA this week when it convenes for Mobile World Congress Los Angeles. Whether the hype turns into reality could be slightly more clear by the end of the week.