by Quah Mei Lee
In studying the key
success factors of many solutions in the telecom industry, it is
often the case 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 or FWA to tech junkies. Today, while we cope with
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 telecoms industry acknowledge that while FWA is not a new
concept, it is the timing and need that contributes to its
rapid growth.
For a number of
years, FWA has been a solution offered on 4G networks. Both the
Global Mobile Suppliers Association (GSA)
and GSMAi have similar estimates 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 fixed wireless
access-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.
What’s driving FWA today?
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 was 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 rollout and onboarding, i.e., reducing deployment time from weeks to
less than one day; faster download speeds, i.e., 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% 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 to 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 4-5 times more than its non-5G solutions with ARPU of USD
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.
COVID-19's positive impact
Due to COVID-19, the telecoms
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. While this 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 telecoms 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% of its total home broadband subscribers and,
encouragingly, corresponding revenue for Globe’s FWA services between Q1 2020
and Q3 2020 increased by 22% 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,
e.g., with new fixed-mobile convergence or FMC solutions. Seamless mobile
gaming that is no longer confined to the indoors with fibre 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.
The need for sufficient spectrum
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, 3.6 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 telecoms industry aggressively
revisiting FMC solutions.
Mobile operators have always
aligned closely to meet country needs as benefits are reaped manifold. 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% in 2013 to 26% in 2019, successfully closing the digital
divide and enabling 0.8 million households with high-speed broadband.
From 2013-2018, 4G FWA contributed
to 60% 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.
Quah Mei Lee is the Associate Director, Telecoms and Payments Strategy – ICT, Frost and Sullivan.