In this slightly belated October update to the 5G-aliser, we are taking a break from our usual assessment of the 20 factors to take a special look at the Fixed Wireless Access (FWA) market
The only factor we have moved this month is on 5G devices and services, to reflect the launch of the long-awaited 5G-enabled iPhone. Replacement cycles for mobile devices are extending, so while this may not materialise into a super-cycle of upgrades, it will nonetheless catalyse demand for 5G services among high-end device users, particularly in iPhone heavy markets such as the US and UK, as well as in affluent markets in the Middle East. This has led to a slight upgrade in overall 5G demand.
FWA: 5G is one of many catalysing forces
4G has already catalysed rapid growth of FWA in numerous markets, such as South Africa, Japan, Sri Lanka, Italy, and the Philippines. This growth has been driven by the combined impact of mobile network operators (MNOs) commercialising FWA services to households in underserved urban areas, the slow pace of fibre roll-out in some countries, government subsidies for rural broadband, and improvements in network planning tools and customer premise equipment with easier self-install options.
According to STL Partners’ latest research and market forecasts, 5G is likely to have a major impact for operators in the coming years, especially from 2022 onwards as more spectrum becomes available to more operators, and equipment prices fall.
That said, 4G will continue to be more important than 5G in the FWA market overall at a global level over the next 5 years; the technology is much further down the cost- and experience curve, as well as using existing network infrastructure and spectrum.
Figure 1: Using a broad definition, FWA will reach 305m premises by 2026
Note: MDUs = multi-dwelling units. Source: STL Partners
Does the pandemic change anything?
While the COVID-19 pandemic has not shifted the outlook for FWA significantly, it may provide a boost for specific use cases such as connectivity for emergency medical facilities, such as mobile testing tents, growing interest in work from home packages, local authorities exploring how to support remote education, all of which are driving telco executives, governments and investors to pay higher attention on fixed/home broadband.
The FWA value chain
For many years, FWA in most of the world has been successfully operated by niche providers in areas typically underserved by wireline broadband services. In rural areas, the distances involved often required the use of expensive outdoor customer-premises equipment with line of sight to the base station sites, installed by trained technicians.
The value chain for WISPs remained fairly static, and mostly dominated by niche vendors that were considerably smaller than the network equipment suppliers into fixed broadband and cellular operators.
Where 4G equipment was used for FWA, it was typically used by mobile-only MNOs either adding an extra proposition to soak up excess capacity in a few areas, or where consumer and enterprise MVNO partners developed niche propositions that appealed to the wholesale business unit. They typically used the same vendors as the main cellular RAN – with the exception of enterprise gateways from providers such as Cradlepoint (recently acquired by Ericsson).
This is now changing. The value chain of vendors and service providers is evolving considerably in the 5G and mmWave era, with the shifts being observed in the WISP market as well as the telco domain. New players entering the value chain include:
• Telco domain
– MNOs evolving converged services, e.g. for work-from-home propositions
– Traditional wireline and cable operators extending their rural footprints
– Neutral host FWA where competitive or regulatory environment favours a wholesale access model – this includes towercos or fibre operators looking at new wholesale opportunities
• WISP domain
– Traditional rural WISP
– Urban gigabit WISP
– New entrants, such as municipal networks
– Internet and cloud players, e.g. Microsoft playing tangentially with its TV White Space initiative, or Facebook’s Terragraph 60GHz mesh technology
From a new US President waiting in the wings to the first signs of a coronavirus vaccine – what do the major upheavals of November mean for the world of 5G? Find out in our next 5G-aliser update