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Ericsson analyzes the current (and future) market for FWA and outlines how operators can effectively monetize their services.
Ericsson continuously researches and monitors major developments affecting the global ICT industry, its customers and itself. Regarding fixed wireless access (FWA), the network infrastructure vendor says in his 2023 handbook that he published that over 75% of all carriers offer some kind of FWA service. 5G accounts for about 33% of these FWA services, a 50% increase over a year ago.
The handbook identifies two variants of a “best effort” service and a service with a speed-based quality of service that guarantees a certain performance metric, offering a higher ARPU than the “best effort”. About 25% of the services offered today are sold against a specific he QoS metric.
Looking at the US market, both AT&T and Verizon are building fiber, but Verizon is more focused on using cellular networks to provide home internet service. T-Mobile US hasn’t done much in terms of building its own fiber, but like Verizon, he’s done great with FWA. Strategic differences can be attributed to a variety of factors, ranging from total network capacity to execution capability, but Ericsson is committed to fiber’s faster time-to-market, lower cost and ability to rebuild. favors his FWA compared to Fiber by emphasizing Use your existing infrastructure.
Ericsson divides the fixed wireless access market into three segments.
- The “wireless fiber” segment, which is positioned to compete with fiber. “Typical sales data rates are 100-1,000+ Mbps and typical ARPU is $50-$100.
- The “build exactly” segment competes with the DSL. Data rates are 50-200 Mbps and ARPU is $20-60.
- The “Connecting the Unconnected” segment focuses on rural areas with few or no fixed options. Data rates range from 10 to 100 Mbps and ARPU from $10 to $20.
A ‘Surgical Approach’ to Successful Fixed Wireless Access
In its handbook, Ericsson states that operators “need to employ a surgical approach to select areas for deployment”… We start by excluding unattractive areas.” In that example, housing in dense urban areas and “deep rural areas” is excluded, which makes up about 20% of households.
“This means that about 80% of households remain addressable in urban areas and dense suburbs, suburbs and rural areas. We then analyze fixed broadband competition and putative fiber construction. By doing so, we will further narrow down the attractive areas for FWA deployment.”
Another factor is the competitive environment. Ericsson found that, in a hypothetical example, an additional 20% of households given access to two or more providers were excluded, leaving 60% of the fixed wireless access market. Another exclusion path based on projected fiber deployment could exclude an additional 15% of the market. “Operators who act quickly can capture FWA territory and make their competitors’ fiber build plans uneconomical.”
Going forward, Ericsson expects fixed wireless access connections to grow to around 100 million by the end of last year and 300 million by 2028. In addition, the number of 5G-capable fixed wireless access connections he could reach 235 million (300 million in total). By 2028.
Read the condensed version of Ericsson’s Fixed Wireless Access Handbook – 2023 edition.
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