In studying key success factors of solutions, it can almost always be shown that the underlying concept was not new. These underlying concepts can be centuries old; however, what makes them successful is timing and need. The same can be said of fixed wireless access (FWA) to tech junkies. Today, amidst the Covid-19 pandemic, words like “market disruptor” and “life changing” have been uttered to describe FWA. GSM Association Intelligence (GSMAi) and many others in the telecom industry acknowledge that while FWA is not a new concept, timing and need are contributing to its rapid growth.
FWA has been a solution offered on 4G networks for years. Both the Global Mobile Suppliers Association (GSA) and GSMAi have about the same estimate of how widespread it is. To date, 4G FWA has been launched by an estimated 406 mobile operators in 164 of the 195 countries in the world. In the remaining 31 countries, there is pent-up demand for FWA-based solutions. 4G FWA is not new, so what is making FWA a focal point for mobile operators now? The answer lies within the combination of additional unique capabilities of 5G and the disruption brought about by the Covid-19 pandemic. Covid-19 is creating urgency for digital solutions to ensure that we can stay in touch and continue our daily lives in the new normal as effectively as possible. In 2020, the spotlight has been on healthcare and education due to the pandemic and national lockdowns. Both verticals are driving 5G and, therefore, 5G FWA because of 5G’s capability to address enterprise needs.
FWA was the first use case for 5G when it was launched in 2018, initially with pre-standard 5G. 5G FWA offers faster roll-out and onboarding, that is, reducing deployment time from weeks to less than one day; faster download speeds, that is, up to 100 Mbps; and the enticing possibility of reducing cost to serve. Download speeds of up to 100 Mbps at affordable pricing in a world where the average fixed broadband speed is still well under 100 Mbps is a unique selling proposition. Therefore, it is not surprising that 5G FWA has been touted to potentially reduce the cost of mobile broadband by up to 25 per cent if supported by massive MIMO and high performance, in-house end-user devices or CPEs. In Japan, SoftBank utilised high performance CPEs to enlarge cell capacity, resulting in FWA speed of up to 261 Mbps. The highest speed exceeded 350 Mbps in some areas, with an average speed between 40 Mbps and 50 Mbps. In Saudi Arabia, Zain deployed its 5G network in October 2019; within a year, its 5G FWA services had gained tens of thousands of subscribers, resulting in the growth of Zain’s ARPU. Zain’s 5G solutions ARPU is now four to five times more than its non-5G solutions with ARPU of $19. Mobile operators are increasingly reaping the benefits of deploying 5G FWA solutions from a performance and economics standpoint.
Covid-19 has disrupted our lives and triggered the urgent need to enhance and upgrade digital infrastructure. It has accelerated the use of technology and is transforming the world. With Covid-19, connectivity needs to be ubiquitous and reliable. This is now a critical and vital need in the new normal as broadband is being used on a global scale to address the Covid-19 pandemic. 4G and 5G FWA help address gaps in supply at the right price points. They also expedite digital transformation by redefining access technology to enable the necessary market disruption. This is why mobile operators have launched packages to support local governments in their fight against Covid-19. Due to Covid-19, the telecom industry has witnessed subscriber and revenue growth for 4G and 5G FWA services. Taking a broader view, it can also be said that Covid-19 has played a key part in putting 4G and 5G FWA in place to meet today’s critical needs and to be ready for the digital world of tomorrow.
Most companies hope to create market disruption. It does not happen often, but when it does, it leaves a lasting impression on the company and end users. However, most mobile operators with FWA are still in the stage of revenue generation from geographical expansion. In the telecom industry, which is known for, on average, marginal revenue growth, getting excited about projecting the growth potential of 160 million households by 2025 is normal. Nevertheless, mobile operators have managed to grow broadband revenue by rolling out FWA. Globe in the Philippines is a good example. Between Q1 2020 and Q3 2020, Globe acquired 1.4 million new FWA subscribers, bringing the total to 2.78 million FWA subscribers. FWA is now the main technology for 80 per cent of its total home broadband subscribers and, encouragingly, corresponding revenue for Globe’s FWA services between Q1 2020 and Q3 2020 increased by 22 per cent compared to the same period in 2019. Another mobile operator, Turkcell is increasing market share in the home and enterprise markets with its Superbox FWA offering. By the end of 2019, there were 323,000 Superbox subscribers, representing a tenfold growth rate in a year.
There is still room for growth beyond connectivity. The early launches of FWA met specific pockets of need. The potential for FWA to enable market disruption is tremendous, especially as we now have the standards enabling network slicing on 5G networks and the launch of the new iPhone 12 that supports 5G. High speed broadband for indoors and outdoors on a single network with a single service provider at an affordable price is possible with 5G. Mobile operators worldwide are taking bold steps to leverage this. Zain in Saudi Arabia is migrating ATMs from VSAT to mobile technology. This move could trigger large cost-structure shifts. Meanwhile, Telkomsel in Indonesia is talking about smarter, faster and more reliable solutions in anticipation of 5G in Indonesia. Going forward, 5G FWA paired with new devices and lower-cost CPE can drive innovation and growth opportunities, for example, with new fixed-mobile convergence (FMC) solutions. Seamless mobile gaming that is no longer confined to the indoors with fiber can be monetised with a blue ocean strategy.
Recognising the potential for FWA, local governments and regulators are taking steps to include FWA in their national agendas. It is encouraging that some countries have already incorporated FWA into their national broadband plan. However, we need more countries to get on board and consider the broader context. Regulators worldwide need to change their mindsets to consider mobile and fixed broadband in the same context to enable adequate competition for connectivity and solutions. To succeed with fixed broadband, unlimited broadband is critical and having sufficient spectrum to offer unlimited broadband is a necessity for mobile operators. Sufficient spectrum, particularly for suburban and rural areas, needs to be allocated, and licensing regimes need to be updated. The Saudi regulator has allocated mid-band spectrum at 2.3 GHz, 3.6 GHz and 3.5 GHz to enable 5G and 4G FWA in the kingdom. Australia is planning to auction 26 GHz spectrum for 5G in March 2021. Optus is considering the spectrum for 5G FWA. With mobile operators armed with ample spectrum and 5G, we will soon see the telecom industry aggressively revisiting FMC solutions.
Mobile operators have always aligned closely to meet country needs as benefits are reaped manyfold. To put it simply, it makes good business sense for mobile operators to support national agendas, so they do so willingly. As governments strive to bridge the digital divide, FWA by mobile operators is playing a big role in poorer countries and regions. With FWA services, Dialog increased household broadband penetration from 9 per cent in 2013 to 26 per cent in 2019, successfully closing the digital divide and enabling 0.8 million households with high speed broadband. From 2013 to 2018, 4G FWA contributed to 60 per cent of the net household broadband additions. In terms of user experience, in 2019, Dialog introduced Per Day Home Broadband for prepaid customers to cater to light broadband users. With connectivity and the ecosystem of 931 LTE FWA devices offered by 88 vendors and 84 5G FWA devices offered by 53 vendors as of June 2020, solutions designed with an acute understanding of needs can reach their full potential.
The pieces of the puzzle are slowly coming together. The introduction of 5G and the onset of Covid-19 have played a part in creating the masterpiece that has yet to be fully unveiled. Contrary to popular belief, the launch of the iPhone 12 is not a signal that new solutions will suddenly crowd the market. I am a believer that if it is going to work, the innovation should have already begun. What we are waiting for now is the handshake of enablement. As a tech junkie, I find the suspense and anticipation of the future thrilling. With 5G FWA growing rapidly, the world’s remaining regulators must take the necessary steps to enable FWA in their countries, and the industry ecosystem must further develop much-needed innovative solutions. All of this will work together to make FWA a critical revenue growth engine.
Mei Lee Quah is an Associate Director with Frost & Sullivan’s ICT Practice where she leads Mobile & Wireless Research for Asia-Pacific. Her area of expertise lies in telecom and payments strategy with a specific interest in 5G and payments.
