5G technology update – how and why are carriers deploying fixed wireless access?
One of the biggest questions currently in the telecommunications industry seems to be “what 5G services will carriers roll out first and how will those services be deployed?”
The answer to that question seems to have been addressed in part by Verizon who have just launched Fixed Wireless Access (FWA) as their first offering in 5G services to the market, a topic covered in this blog post by Peter Linder.
So how does the Verizon offering of FWA fit into the market? Is that applicable only to developed markets? Do we need to wait for 5G? Is it possible to make money? I sat down with John Yazlle, Program Director, 5G Commercialization, Business Area Networks, Ericsson, to gain key insights on FWA today and to learn why FWA is likely to be the 5G "killer app" for early deployments.
Firstly, let's clarify what FWA is. Fixed Wireless Access is in its simplest form a device that remains in a fixed location (i.e., it does not move around like a mobile phone) usually it is in the form of a wireless router (with WIFI wireless LAN access point to connect to home devices) connected to a carrier network via subscription of some form.
Some FWA solutions might have an outdoor antenna to have higher speeds and improved connectivity at remote locations. In short, it is the same as a fixed broadband service (cable, DSL or fiber) using wireless connectivity.
Talking with John it became clear for many reasons, both technically and commercially, FWA services are likely to be brought to market by operators investing in early deployments of 5G. Carrier see increased household demand for bandwidth as growth opportunity. At the same time, they see that fiber deployments are not always economic viable, it takes time to deploy and it requires heavy initial investments. FWA is a competing or complementing (in the Verizon case) solution that has many key value points such as:
- significantly lower cost to deploy
- no on prem or in street wiring required
- faster time to market to roll out (no permits)
- shorter time to realize ROI in infrastructure by operators
We've seen this sort of connectivity before in early stages of the rollout of 3G and 4G. In Australia for example, wireless broadband was available in both FWA and "mobile modem" format for laptops.
Later on, NBN has targeted home broadband connectivity in some segments using FWA offers. It's important though to note that FWA in it's latest form via 5G offers, in particular using millimeter wave such as with Verizon, provides fiber-like service speeds. At the same time, 4G has evolved significantly enabling operators to provide 4G based FWA services with better quality of service than legacy copper and cable technologies.
It's reported that by year 2023, less than half of the world's 2.2 billion households will have a physical broadband connection via copper, cable or fiber. This is an astounding finding when we consider that as of 2018 an estimated approximately 3.2 billion people, or almost half of the world's population are now "online" (connected to the internet). At the same time, global coverage of 4G is set to surpass 85% of the population in 2023, making 4G based FWA as a highly attractive option to narrow that gap.
No matter how you look at it, the fact that 50% of the world's population are still waiting for reliable broadband access means there are a significant number of households globally which still have no connectivity. Many operators have launched best effort FWA offers, but there is an opportunity to provide more.
Ericsson just published an economic study into FWA which goes into these topics in far more detail. For instance, payback for an FWA "Build with Precision" scenario could be as low as one year. Sensitivity analysis using +- 50% variability in the main parameters shows payback of less than two years for 80% of the simulated cases.
Five key principles came out of this economic study:
- Profitable growth opportunity with large share of underserved households, not just in emerging markets
- Shared investment with mobile broadband using same assets and spectrum bands, minimizing risk and having lower upfront investments than fixed broadband
- Tailored solutions for different segments with dimensioning based on fixed and mobile paradigms
- Surgical capex allocation per targeted area in three steps: Utilize, Add and Densify
- Future proof broadband solution with evolution of LTE and 5G
John actually recently hosted a Webinar with peers from the team at Ericsson titled "FWA makes even more business sense with the evolution to 5G" where John and the team delve into all the key topics and questions operators are seeking answers to around FWA. I highly recommend you make time to watch it on-demand and share it within your organization.
After my time with John, as a result of independent research I've undertaken, as well as my constant monitoring of the market wearing my Market Analyst hat, it's clear to me that operators seeking an early entrant service offering with best fit for existing and new emerging markets would be wise to make FWA one of the primary services on offer.
I for one, eagerly look forward to being able to sign up for a 5G Fixed Wireless Access service soon with a carrier near me. The future is bright, the future is FWA.
This has been a guest post from Dez Blanchfield