5G was once touted as a futuristic technology that could enrich everyone’s mobile experience, but it has been more successful in supplying basic broadband at speeds and prices that satisfy consumers. Both Verizon and T-Mobile expect to double their 5G fixed wireless access (FWA) subscriber numbers within the next four years. T-Mobile ended Q3 with 6 million FWA subscribers and has said it will hit 12 million by 2028. Verizon had 4.2 million FWA subscribers at the end of Q3, and said it will have 8-9 million by 2028.
AT&T is the one nationwide carrier that has stayed home from the FWA party, instead taking a business-first approach to the technology. At December’s UBS Global Media & Communications Conference, AT&T CEO John Stankey described AT&T’s example FWA customer as “a construction office with a bookkeeper.” He added that such a business would likely need “handsets for contractors in the field.” Continue reading
That’s a very different type of customer than AT&T’s competitors portray in their 5G home broadband ads, which show families happily streaming, gaming, and posting.
“I just don’t believe there is sustainability in selling fixed wireless into a four bedroom home where people are doing what normal customers are doing and what consumption trends are going to be over time,” said Stankey at the UBS conference. “It may work now, but three years from now it gets costly, because you now start having incremental investment decisions.”
Stankey, who is projecting an 80 percent increase in home broadband consumption within the next 5 years, said AT&T is betting on fiber home internet because it will “scale at lower marginal cost per next bit of consumption.” He believes AR/VR applications, 4K video, and unicast streaming will all contribute to higher in-home bandwidth demand, a demand he thinks FWA cannot satisfy long term. “I don’t want to invest extensively in high customer acquisition cost for something that doesn’t have long shelf life, isn’t durable,” he said.
Already, the bandwidth consumed by a typical 5G home gateway on a normal evening is orders of magnitude higher than that used by a smartphone. Add in Monday NIght Football or another major media event, and FWA can place a heavy load on carrier networks. Some 5G home internet users are perfectly happy with their daytime network speeds, but see a marked slowdown in the evening as they share the bandwidth with more neighbors.
No one is more aware of these issues than the T-Mobile executive team, and yet these leaders believe FWA is just getting started. “Is it here to stay? The answer is absolutely yes,” said T-Mobile President and CEO Mike Sievert, speaking at the same UBS conference as Stankey. He acknowledged that demand for speed and capacity are on the rise, but said that does not make FWA “a moment in time technology.”
“Wireles technology is improving at at least the rate that demand is increasing,” said Sievert. He noted that the average wireless consumer in the U.S. is currently experiencing quadruple the average speeds experienced in 2019.
T-Mobile does not foresee a change in the economics of FWA. “Our business model for fixed wireless focuses on fallow capacity,” Sievert said. “We find the pockets all over the country where no normal amount of mobile usage will take up our capacity and only in those places do we approve an applicant for home broadband. Our 12 million plan sticks with that.”
Asked whether T-Mobile could someday surpass its projected 12 million FWA subs, Sievert said “It’s too early to say. Or, will we find a capital-burdened technology that actually works, meaning where you can get a great return? Too early to say, but we’re on the hunt.”
This article represents the opinions of veteran telecom industry editor and journalist Martha DeGrasse, an Inside Towers Contributing Analyst with features appearing monthly. DeGrasse owns Network Builder Reports and contributes regularly to several publications. She was formerly a writer and editor with RCR Wireless and a TV business news producer.
By Martha DeGrasse, Inside Towers Contributing Analyst
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