In studying key success factors of solutions, I find that it can almost always be shown, assuming one is enthusiastic enough to look for evidence of it, that the underlying concept was not new.
These underlying concepts can be up to centuries old, however, the difference that makes them successful is timing and how the problem statement was addressed i.e. with or without an acute understanding of need. The same can be said of fixed wireless access or commonly known to us tech junkies, as FWA.
Today in the COVID-19 era, words like “market disruptor” and “life changing” have been uttered to describe FWA. GSMA intelligence and many others in the telecoms industry acknowledge that while FWA is not a new concept, timing and need are both contributing to the rapid growth that we are seeing of late.
In fact, FWA has been a solution offered on 4G networks for years. Both GSA and GSMAi have about the same estimate of how wide spread it is. To date, 4G FWA has already been launched by an estimated 406 mobile operators in 164 of the 195 countries in the world. In the remaining 31 countries, it cannot be said that there is not pent up demand for fixed wireless access based solutions.
4G FWA is clearly not new. So, what then 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 the urgency for digital solutions to ensure that we can stay in touch and continue our daily life in the new normal as effective as possible. The spotlight in 2020 has been on healthcare due to the pandemic and education due to national lockdowns. Both verticals are driving 5G and therefore, 5G FWA; mainly because of 5G’s capability to address need.
FWA was the first use case for 5G when it was launched selectively in 2018; initially with pre-standard 5G but nevertheless still 5G technology. 5G FWA offers faster rollout and on-boarding i.e. reducing deployment time from weeks1 to less than one day2, faster speeds download speeds i.e. up to 100 Mbps3, and the very enticing possibility of reducing cost to serve.
Download speeds of up to 100 Mbps at affordable pricing in a world where average fixed broadband speed is still well under 100 Mbps4 is a unique selling proposition. Therefore, it is not surprising that 5G FWA has been touted to potentially reduce cost of mobile broadband by up to 25% if supported by massive MIMO and high performance in-house end user devices or CPEs. In Japan, Softbank utilized high performance CPEs to enlarge cell capacity, resulting in FWA speed of up to 261 Mbps. In some areas, the highest speed exceeded 350 Mbps, with an average speed between 40 Mbps to 50 Mbps. In Saudi Arabia, Zain deployed its 5G network in October 2019 and within a year, its 5G FWA services had gained tens of thousands subscribers resulting in an uplift on Zain’s ARPU. Zain’s 5G solutions ARPU is now 4-5x more than its non-5G solutions with ARPU of USD 19.5 Mobile operators are increasingly reaping the benefits of deploying 5G FWA solutions; both from a performance and economics standpoint.
The onset of COVID-19 in 2020 has not only disrupted our lives but has 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 that was not ubiquitous before now not only needs to be ubiquitous but also reliable. The need is now a critical and vital need in the new normal as it is on a global scale that broadband is being used to address the COVID-19 pandemic. 4G/5G FWA helps to address gaps in supply at the right price points.
It also expedites digital transformation by redefining access technology to enable the necessary market disruption. This is why mobile operators have launched packages to support local governments fight against COVID-19. With COVID-19, the telecoms industry has witnessed a subscriber and revenue growth both 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 the critical needs of today but also to be ready for the digital world of tomorrow.
Creating market disruption is an aspirational goal of most companies. It does not happen often but when it does, it leaves a lasting impression; not just for the company but also for end users. However, the stage at which most mobile operators are with FWA is still revenue generation from geographical expansion.
In the telecoms industry that is known for on average marginal revenue growth, getting excited over projecting growth potential the size of 160 million households by 20256 is norm. Nevertheless, mobile operators have managed to grow broadband revenue through rolling out FWA. Globe in the Philippines is a good example. Between Q1 2020 to Q3 2020, Globe had acquired 1.4 million new FWA subscribers bring the grand total to 2.78 million FWA subscribers. FWA is now the main technology in 80% of its total home broadband subscribers and encouragingly, corresponding revenue for Globe’s FWA services between Q1 2020 to Q3 2020 increased by 22% compared to the same period in 20197. Apart from Globe, another challenger mobile operator, Turkcell is increasing market share in the home and enterprise markets with its FWA offering called Superbox. By the end of 2019, there are 323,000 Superbox subscribers, representing 10 times growth rate in a year. 8
There is still much room for growth beyond connectivity. The early launches of FWA were to meet specific pockets of need. The potential for FWA to enable market disruption is tremendous especially as we now have the standards for enabling network slicing on 5G networks and the launch of the new iPhone 12 that supports 5G. With 5G, high speed broadband for indoors and outdoors on single network with a single service provider at affordable pricing is possible. Mobile operators worldwide are taking bold steps to leverage on 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 e.g. with new fixed mobile convergence or FMC solutions. Seamless mobile gaming that is no longer confined to indoors with fibre can be monetized with a blue ocean strategy.
In recognizing 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 the broader context to be taken into account. Regulators worldwide need to change their mindsets to consider mobile and fixed in the same context to enable adequate competition on connectivity and solutions. To succeed at competing with fixed broadband, unlimited broadband is critical so having sufficient spectrum to offer unlimited broadband is a necessity for mobile operators. Sufficient spectrum particularly for suburban and rural needs to be allocated and licensing regimes need to be updated. The Saudi regulator has allocated mid band spectrum at 2.3, 3.6, 3.5 GHz to enable 5G and 4G FWA in the kingdom. Australia is planning to auction 26 GHz spectrum for 5G in March 2021.9 Optus is considering the spectrum for 5G FWA. With mobile operators armed with ample spectrum and 5G, we will soon see the telecoms industry aggressively revisiting FMC solutions.
Slowly but surely the pieces of the puzzle are coming together. The introduction of 5G and the onset of COVID-19 have played a part in enabling 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 now suddenly crowd the market. I am a believer that if it is going to work, the innovation should have already started. What we are waiting for now is the handshake of enablement. As a tech junkie, I find the suspense and anticipation of what the new world order will look like thrilling. With 5G FWA growing rapidly, what is left is for the remaining regulators of the world to take the necessary steps to enable FWA in their countries and for the industry ecosystem to develop further the much needed innovative solutions. All of this collectively will work together to drive FWA as a critical revenue growth engine.
Quah Mei Lee is an Associate Director with the Frost & Sullivan ICT practice. She leads Mobile & Wireless Research for Asia-Pacific and focuses on telecoms and payments strategy. Supported by her expert team, she drives thought leadership in telecoms and payments strategy and mobile digital services research.