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What’s the market potential for 5G fixed wireless access?

Next week TM Forum will publish a comprehensive and detailed report on 5G, looking at the status of network technology, spectrum and devices; potential use cases; the promise of network slicing; and how operational and business support systems will have to change to manage and monetize 5G. In this article the author of the report, Mike Hibberd, examines the market potential for fixed wireless access.

Mike Hibberd
18 Apr 2019

What’s the market potential for 5G fixed wireless access?

Next week TM Forum will publish a comprehensive and detailed report on 5G, looking at the status of network technology, spectrum and devices; potential use cases; the promise of network slicing; and how operational and business support systems will have to change to manage and monetize 5G. One segment of the report looks at fixed wireless access (FWA) as a 5G use case. In this article author Mike Hibberd, Independent Analyst & Consultant, examines its market potential.

The use of the mobile network to provide an alternative or complementary service to fixed broadband is nothing new, and FWA services using LTE are well established. However, the significant gains offered by 5G in terms of capacity, latency and throughput may for the first time position cellular to offer genuine performance competition to fiber-to-the-premises (FTTP) solutions.

Dave Dyson, CEO of UK operator Three, argues that 5G “levels the playing field” for domestic broadband connections thanks to the huge leap in capacity it affords.

Click on the image below to watch Dave Dyson speak at Huawei’s Global Mobile Broadband Forum event in November 2018:
Ovum supports Dyson’s view, describing 5G FWA as a “credible alternative to Fixed-Wired broadband,” in particular for HD video and latency-dependent gaming, and predicting that it will feature in the solutions mix of “major players.”

Lower costs


The cost efficiency of FWA for the last mile in urban environments is an oft-expressed benefit of the technology. Nokia has stated that: “Avoiding the need for time-consuming and high-cost civil works to lay fiber, 5G delivers faster time to market and opens up the home broadband market by enabling new entrants to compete against fixed line CSPs.”

SNS Telecom has estimated that 5G-based FWA can reduce the initial cost of establishing last-mile connectivity by 40% over FTTP. However, it is difficult to generalize as 5G FWA deployments are expected to vary not just from city to city but between different neighborhoods. For example, apartment buildings with good line of sight may be easier to serve than groups of houses which might each require external CPE (and therefore an engineer visit, which eats into cost savings).

Nokia modelled 5G FWA for a European CSP and found the business case to be highly sensitive to both average revenue per subscriber, which needed to be kept above €40, and the number of households supported per site, which the firm said should be “at least 30”, as well as site CapEx.

SNS Telecom has forecast 5G FWA revenues of $1 billion worldwide by the end of 2019, and a compound annual growth rate of approximately 84% between 2019 and 2025, leading to a global market worth more than $40 billion.

Meanwhile Ovum predicts that 5G will account for 21.9% of the global FWA market by 2023, and FWA will account for 3.1% of the global fixed broadband market at the same point. In some markets, the firm predicts, FWA could take 10% to 15% of fixed line business.

5G FWA may have potential, but forecasts represent just a fraction of the overall broadband market, and of mobile operators’ revenues. While some operators intend early FWA networks to become part of the wider mobile network, with spectrum shared between FWA and cellular users, it may in some instances be necessary for FWA to operate in dedicated spectrum to protect quality of service. This may in turn suit specialised players rather than incumbent operators.

Be sure to check back for the report, 5G: Evolution and revolution, which will address FWA as an early 5G use case along with others CSPs are hoping to monetize.