Insight
Fixed-wireless access, or FWA, is a type of wireless technology that enables fixed broadband access over wireless, instead of hardwire technologies, such as cable, xDSL or fibre. FWA can be used to connect homes and businesses to the internet usually via a `plug and play’ modem solution. FWA’s ability to reach premises quickly (no slow fiber builds) and economically (for example rural areas) is thus proving it to be a viable option for fast broadband.
5G FWA services have proven to be one of the most successful services to come out of 5G, and its subsequent evolution to 5G Advanced means faster speed and even lower latency. FWA technology is constantly evolving and expanding, with over 70 5G networks and almost 10.7 million 5G FWA users globally, according to global research firm, Omdia.
In the Middle East region, 5G FWA has achieved great success. Since the launch of 5G in 2019, up until now, Omdia estimates that Middle East & Africa has amassed more than 1.6 million 5G FWA users. In addition, FWA has become a new engine for operators’ revenue growth. In the Middle East alone, Omdia forecasts FWA service revenue CAGR (compound annual growth rate) of 10.6% in the five years to 2028.
5G FWA’s faster speed will help ME&A operators snare a further potential 14 million users upgrading from 4G FWA. At the same time, Omdia estimates there are around 16 million DSL users in the Middle East some of which could be 5G FWA migration targets. All these paint to an optimistic picture for the continued growth of 5G FWA in the region in the coming years.
On day 2 of this year’s Mobile Broadband Forum (MBBF), Total Telecom had the pleasure of sitting down with Nicole McCormick, Senior Principal Analyst of 5G & Broadband, Pricing and Strategy at Omdia, and Yang Tao, Vice President of Huawei’s 5G and LTE TDD Product Line, in an exclusive interview to discuss the future development of 5G FWA.
When asked about her thoughts on the development of 5G FWA, McCormick notes how FWA isn’t new, and that it’s been around since the launch of 5G four years ago. To explain this, she points to three development phases. The first was all about connectivity. Here operators were rolling out 5G FWA particularly where there was no fiber or other fixed broadband alternatives. The next phase, also a key topic of discussion at MBBF, involves operators considering retiring copper networks and replacing them with FWA in some cases, given FWA’s speed gains. The last phase sees operators (particularly in the Middle East) begin to discuss value-added service monetization, moving the FWA dial beyond pure connectivity – options include adding cloud gaming, AR/VR, 4K-enabled apps, and smart home.
Middle East telcos lead new monetization 5G FWA strategies
McCormick explains that FWA operators are at a turning point. Do they continue to price 5G FWA as the value-alternative to fixed, or do they leverage faster speeds to offer 5G-rich apps to consumers? 5G rich applications and services, such as cloud gaming, work on 4G but their performance and the consumer experience is better on 5G due its faster speeds and lower latency. In the Middle East, advanced fixed-wireless operators have already started to bundle these types of services alongside 5G FWA plans. Such services were traditionally the mainstay of leading fiber or cable operators, but providing more than just a fat pipe is starting to spill over into the 5G fixed-wireless domain as well, creating an additional business case for some operators. McCormick says not all operators will opt to shift the 5G FWA business case beyond FWA’s main value-for-money upsell lever. But operators in the Middle East that attended MBBF, held in Dubai, had and do plan to bundle services to enhance their share of the consumer broadband wallet.
Further, MBBF delegates said it was essential that the efficiency of the spectrum is maximized to guarantee the customer experience and lower costs. During the conference, the creation of the 5G FWA Industry Acceleration Initiative, supported by Huawei, was announced. The goal is to make 5G FWA the number one choice for home broadband; drive economies of scale for CPEs; simultaneous 5G and 5G FWA deployments; and prioritising spectrum efficiency to reduce cost.
From Huawei’s perspective, the future development of FWA will? take three possible directions: high speed downlink ~500 Mbps (for XR), high speed uplink ~50Mbps (for SMEs), ultra-low latency ~20ms (for gaming).
from Huawei’s perspective, the market is separated into three waves, with Europe and the Middle East being in the first wave. In the first wave market, the key challenge is to guarantee the user experience. To that end, Huawei has mastered the use of carrier aggregation (CA) to provide a 500 Mbps download speed. Additionally, they also provide features to guarantee the user experience.
In second wave markets, such as, Asia and America, the challenge is how to lower the CPL (cost-per line) of FWA because currently, it is twice as expensive as 4G. This is less of a problem in first wave markets, but it will be a big challenge in the emerging second wave markets. Therefore, the firm wants to bring on more partners to design and manufacture cheaper CPEs. Here, notes Tao, more needs to be done to lower the cost in the market. In emerging markets, the CPL must be under $100, he said.
Lastly, in the third wave markets, such as Africa, 4G and 5G networks should be combined together to provide the connections for home.
To support the future direction of FWA, in June this year, Huawei launched the new FWA² solutions, allowing operators to help bring 5.5G FWA into reality. This solution scenario is built around three pillars. The first is ‘FWA Pro’, which suits the high-speed needs, the second is ‘FWA Lite’, which is the cost friendly option, and lastly, the third is the ‘FWA Biz’, developed to support the needs of the businesses. Each of these three scenarios have both different services and capabilities, designed to meet the different requirements of each customer.
As always, the price point of CPE devices remains a sticking point for critics. Tao notes that the average price of a 5G CPEs is now close to $100 this year, while the price of RedCap CPEs, expected to be launched in Q4 this year, will be even lower. Huawei estimates that the price of 5G CPEs will be similar to that of 4G CPEs by 2025. In emerging markets, CPE price is a challenge for consumers. Once it drops below $100, it will kickstart the acceleration of 5G FWA in emerging markets. On this point, McCormick adds that just recently, a second operator – Reliance Jio – launched 5G FWA in India, a big market that had previously been untouched. She concurs that the price of CPEs still needs to drop well below $100 to facilitate 5G FWA’s growth in emerging markets, including Africa.
Zain KSA launches world’s first “5.5G” fixed-wireless
At MBBF, Zain KSA announced the launch of its next generation 5G FWA plans, called ‘FWA Plus,’ leveraging “5.5G” technology to enable 500Mbps peak speed, uplink of more than 50Mbps, and less than 20ms latency. But Zain says maximizing spectrum efficiency, lower latency and faster uplink remain challenging. It does however see the enablement of immersive applications, from FinTech to e-Sports, and fixed-wireless as key to facilitating the goals of Saudi Vision 2030.
To demonstrate these improved network capabilities, for example, operators in the Middle East are considering bundling smart home services with 5G FWA. But McCormick emphasizes how speed is still an upsell lever, that when marketed correctly, and is not over-hyped, and value-for-money can still be an attractive selling point for 5G FWA.
Omdia’s 5-year forecast (going up to 2028) has India as the leading FWA market, so it has huge potential. Omdia forecasts fixed wireless subscription CAGR at about 16% to 2028. This is higher than any other broadband technology. By 2028, Omdia estimates that there will be more fixed wireless access users in the global market than DSL subscribers.
Concluding on how Huawei will directly contribute to the 5G FWA development itself, Tao explains how the company are utilizing both their R&D potential and their influence in the industry to help solve issues in the industry and help their customers achieve business success. They are achieving this through product innovation, tool development which will support end-to-end operations, and working with third parties to create a vast array of CPEs, which will include both high-end and low-cost solutions.
