FWA projected to grow dramatically, but it still has problems

There’s a huge opportunity for fixed wireless access (FWA) growth around the world, and that opportunity has been especially highlighted during the Covid-19 pandemic.

Speaking on a recent podcast, Counterpoint Research Senior Analyst Tina Lu said only 45% of households worldwide had broadband at the end of 2019. But if Chinese households are removed from the equation, only 28% of global households are connected to broadband.

“This is the primary drive to the growth of FWA,” said Lu. “Also Covid-19 is making broadband a priority. It’s not just a luxury. It’s a need.”

Counterpoint Research predicts 60 million users for both 4G and 5G FWA by the end of 2020, with 10 million of those being 5G FWA users. “The U.S. is driving the growth of FWA with deployment of mmWave in metro areas and CBRS in the rural areas,” said Lu.

Counterpoint predicts the number of FWA users to grow from 60 million to 200 million by 2025.

However, FWA does face challenges.

Shiv Putcha, founder of the analyst firm Mandala Insights, said 5G FWA that uses mmWave spectrum presents a challenge in terms of the distance between the wireless base station and the customer premise equipment (CPE).

FWA problems on mmWave

“When you utilize mmWave bands, as in the case of Verizon, the base station needs to ideally be within 500 meters of the CPE,” said Putcha. “Now if the CPE is located indoors, then the distance requirement shrinks even more to under 300 meters. That means the base station has to be really close to the household. And how many can you have?”

Verizon recently announced that it was deploying FWA on 4G, which seems to support Putcha’s premise that deploying 5G FWA on mmWave has challenges that still need to be overcome.

Verizon had been touting its 5G Home FWA service for a while. But apparently the high demand for home internet spurred by Covid-19 caused Verizon to quickly pivot and deploy FWA on its LTE network.

RELATED: Verizon surprises with fixed wireless access on 4G for rural areas

In an email to FierceWireless, Verizon said, "Verizon’s 4G LTE network currently covers over 98% of the population. We are one year into the rollout of 5G, and it’s going to be a years-long effort to fully deploy 5G technology, just as the deployments of 4G LTE and 3G were. We will continue our aggressive rollout of 5G, however we wanted to provide a product that will benefit our rural customers now. With more and more people working from home and engaging in distance learning, we wanted to make this resource available now.” 

In addition to distance issues, FWA on mmWave also has to contend with mmWave’s propagation problems where the signal can be lost with obstacles like foliage and buildings.

Putcha also noted that FWA can have different challenges on mid-band spectrum. “On the flipside, if you’re using the lower band, say 3.5 GHz, which is what Optus is using in Australia, then you don’t have the coverage issues so much but there is a hard tradeoff with how much capacity you have,” said Putcha. “The capacity is lower than with mmWave.”

In the United States, lots of stakeholders are looking at Citizens Broadband Radio Service (CBRS) spectrum in the 3.5 GHz range for FWA deployments. But they will have to deal with the same capacity issues as Optus.

RELATED: Canadian cableco Cogeco tests fixed wireless access on CBRS spectrum

Other issues related to FWA deployments are backhaul and CPE gear. Putcha said, “How do service providers connect their base stations back to the core network?”

Ideally this would be over fiber. In some countries in the world, fiber is relatively pervasive, but in many places it is not.

And finally, there is the need for CPE that’s easy for customers to self-install. The business case for FWA goes to pot if service providers have to send a truck-roll to help the subscriber set up the CPE.

For its 4G FWA, Verizon requires the purchase of a $240 router, and customers will have to self-install the device, which Verizon describes as “easy self-setup.” A Verizon video makes it look like customers just need to plug a cord into the router.

But in terms of 5G FWA, Putcha said, “If you look at the range of the cheapest 5G CPE today, it comes from $500 to nearly $1,000. It needs to drop much lower to boost adoption. We’re expecting to see a raft of new devices coming into the market starting in Q3 and Q4.”