The technology set to play a small but significant support role
In our Market Forecast: 5G Connections, Worldwide, 2020-2025 — published earlier this month — we predict 5G fixed wireless access connections to reach 50 million by the end of 2025. Despite this huge number, the role of fixed wireless access technology will remain limited, representing less than 1% of all 5G connections worldwide by 2025.
Fixed wireless systems provide broadband access using a wireless signal between two fixed points, hence the name. In a typical home connection, the fixed points are the local mobile base station and an antenna on the outside of the building receiving the service. The antenna is connected to a router inside the home. Signals travel from the mobile base station through the air to the antenna, which forwards them over a short fixed line to the internal router.
There are two main advantages for service providers: faster deployment and lower costs. The installation of a fixed wireless access connection is quicker and cheaper than its traditional fixed-line counterpart because the use of wireless connectivity avoids the laborious and disruptive task of digging up roads to put fibre into the ground.
Its lower deployment costs offers potential for challenger brands to undercut on pricing, particularly in areas where there may only be one major fixed-line competitor. The concept could also prove attractive to the growing number of cord-cutters seeking to build their own packages of broadband access and entertainment content.
However, there are disadvantages too, with the main ones being speed, reliability and the need for spectrum. Performance can vary depending on the terrain and even the weather, but in most situations fixed wireless transmission speeds are no match for technologies such as fibre. The use of millimetre-wave frequencies for fixed wireless — an approach taken by Verizon in the US, for example — can limit coverage owing to the low propagation characteristics of these bands.
Despite its advantages, fixed wireless access has remained a niche technology throughout the past 30 to 40 years of worldwide development of broadband services. Most of today’s fixed-line broadband networks, especially those in developed markets, have their origins in the telecommunications networks of yesteryear. Rather than scrap existing copper networks in the ground, network owners have made successive upgrades until they became the high-speed networks of the digital world.
During this time, fixed wireless access didn’t really stand a chance. It couldn’t compete with fixed-line technologies other than in certain rural scenarios, and operators couldn’t justify extensive investments in fixed wireless deployments. Instead, the technology was and is mainly used to provide connectivity where fixed-line installation is not feasible. One of the main reasons for not installing a fixed-line connection is that it is too expensive, especially in areas of low population density. Network operators often consider fixed wireless access as an option for the provision of connectivity in smaller towns where masts and infrastructure are already in place. It’s also been used to provide broadband services in rural areas because it’s cheap and quick to install.
But the huge capacity, high throughput and low latency features of 5G technology, as well as its much lower cost per bit than preceding generations of mobile networks, have alerted Internet service providers to the potential of 5G fixed wireless access. A 5G fixed wireless connection is an attractive proposition. Operators in countries where fixed wireless access is already in use, such as the US, the UK and Australia, are upgrading existing 4G connections to 5G.
Such operators include US-based Verizon, which recently launched an all-in-one 5G receiver and Wi-Fi router. According to Verizon, customers can expect typical speeds starting at 300 Mbps; by comparison, the average download speed for Verizon’s fibre-based Fios service is 146 Mbps. The service is available in parts of Chicago, Detroit, Houston, Indianapolis, Los Angeles and Sacramento.
Despite new launches in the US, we expect China to be the biggest source of growth in 5G fixed wireless access connections from 2021 onward, even though the technology will be mainly used in hard-to-reach locations.
As 5G networks expand, fixed wireless access becomes more feasible with more-attractive economics. It will never be a full replacement for fibre, but it’s destined to play an increasingly important support role in some markets.
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