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As 5G is the first mobile generation to be introduced for Fixed Wireless first, we expect a high level of innovation. A scenario where the suggested jobs at this stage are a hypothesis of what we might see.
The 5G Fixed Wireless Access Application landscape
Fixed Wireless Access has been introduced for a variety of radio technologies in the past, e.g. NMT, DECT, 3G, 4G. All when the technology was well proven. And with moderate success since the primary competition was a high performance DSL or Cable Access and penetration rates were modest at best. 5G Fixed Wireless Access is introduced at a different stage in the radio lifecycle, addressing a set of different applications each with unique characteristics. Based on fiber access dynamics, we can expect the following to occur: Neighborhood-driven build-in targets; the potential for access network sharing, especially in suburban and rural areas; converged aggregation and transport networks serving both fiber and Fixed Wireless Access.
Increase penetration in areas already covered with fiber access
Fiber to the home has been built during the majority of this century and deployed by operators or regionally focused open fiber networks. The largest variable has been the rate at which households have been penetrated. The application in these areas is to increase the market share in a given neighborhood. The job to be done, for mobile operators, is: “Increase market share with an access complement to fiber offered at a lower price and/or faster/cheaper connection cost:” A job to be done in competition with existing DSL and Cable offerings. Success metrics for this job are: Service parity with fiber access, time-to-market, cost per connected household, and lead time for connecting a new household. 5G FWA penetration projections for this application is in the 10-20 percent range and a medium-to-high volume outlook.
Penetrate gaps in existing fiber footprints
Fiber access deployments often result in building or neighborhoods in a covered area left unserved. Access to duct and right-of-way inside buildings can be restricted. Access in neighborhoods can be limited by unfavorable geological conditions, or a lack of backbone connection options. The job to be done is: “Connect pockets of households as a complement in existing fiber access footprint.” Success metrics for this job are: Service parity with Fiber access, Ability to penetrate all households and Cost of connecting islands to mainstream fiber access neighborhoods. 5G FWA penetration projections for this application is close to 100 percent for a very low volume application.
Extend coverage outside existing fiber access footprints
Fiber access coverage is restricted to certain regions and neighborhoods. Where the potential and profitability vary greatly. Connection costs, rather than coverage costs, have been a key factor in defining business case attractiveness. Fixed Wireless 5G Access reduces the cost of connecting households by eliminating digging in gardens and roads. The job to be done is: “Expand the coverage area for a fiber-like access beyond the existing fiber footprint by reducing connection costs.” Success metrics for this job are: Service parity with Fiber access, Household density in a given neighborhood, Size of unpenetrated market, Cost per connected household and time to market. 5G FWA penetration projections for this application is 25-100 percent for a high to very high volume outlook.
Geographical expansion from converged-to-mobile footprint
The majority of operators have a smaller footprints for Converged (Fixed and Mobile) versus Mobile-only access. Operators penetrate regions or countries with their converged access network. The mobile network is penetrating countries, continents and beyond. With a mobile network going through a wave of densification and introduction of small cells there is a potential for selective introduction of 5G FWA. The job to be done is: “Leverage the mobile network footprint as a base for expanding converged network coverage into attractive neighborhoods.” Success metrics for this job are: ARPU potential, time to market, and service superiority to legacy alternatives. 5G FWA penetration projections for this applications is in the 0-30 percent range for low-to-medium volumes.
Transformation of rural areas to a Fixed Wireless-only access
A large part of the tail of the fixed network has been underserved with regards to Broadband services. This in combination with an aging PSTN network open up for a rural access transformation. One where 5G FWA is introduced and legacy cable and copper access networks are phased out. The job to be done is: “Transform an inferior broadband and an ageing PSTN access into a high performance fixed wireless access.” Success metrics for this job are: Service superiority to legacy alternatives, Opex for the new network, Regulatory relief for must carry services and Investment accelerators. 5G FWA penetration projections for this applications is 80-100 percent for low-to-medium volumes.
Predictions for the future
My predictions for the development we will see are:
5G Fixed Wireless Access will be leveraged to selectively address these five applications.
-Wireless neighborhoods – Wiberhoods – will be a new phenomenon enabled by 5G Fixed Wireless access.
-The first mover will create significant shifts in market share, rarely seen between established broadband technologies.
-The job to be done and the success metrics for each application will vary substantially, and be refined as the technology is introduced.
-The application introduction order will be defined by the outlook of the combination of volume and penetration potential.
By Peter Linder, Head of Business Mgmt & Sales Support, Ericsson
February 14, 2017