FWA Wars! Really? – Inside Towers

AT&T (NYSE: T) and Verizon (NYSE: VZ) differ on offering fixed wireless access. Here’s the deal. Verizon, as does T-Mobile (NASDAQ: TMUS), offers FWA by sharing unused mid-band spectrum on their mobile networks. Primary MNO FWA targets are telco and cable customers looking for better alternatives to their wired internet connections. FWA customers can self-install the wireless router provided by the MNO. Note that MNO FWA differs from what wireless internet service providers offer. WISPs install dedicated point-to-multipoint radios on towers and beam signals to rooftop antennas that connect to customer premise equipment inside homes or businesses. Installing CPE usually requires a truck roll.

Verizon offers FWA on its 5G Ultra Wideband service that utilizes 161 MHz of mid-band C-band (3.7-3.98 GHz) spectrum. 5G Ultra Wideband will cover 200 million POPs in 1Q23 with expansion to 250 million POPs by year-end 2024. In its 4Q22 earnings call, CEO Hans Vestburg said, “This is an example of how we can monetize our multipurpose network by scaling several revenue streams on the same infrastructure to enhance our return on investment.” The company ended 2022 with more than 1.4 million FWA subscribers and expects that to grow to 4-5 million by the end of 2025. 

Similarly, T-Mobile offers its 5G Home Internet FWA service using its 154 MHz of 2.5 GHz spectrum on its 5G Ultra Capacity service that it expects will reach 300 million POPs by the end of 2023. T-Mobile ended 2022 with 2.6 million 5G Home Internet FWA customers and is tracking to reach 7-8 million by 2025.

By contrast, AT&T says its FWA will be targeted at specific market segments that do not interfere with its fiber plans. The company believes FWA requires specific marketing strategies and a different economic model compared to its mobile network model. AT&T previously said it has 130,000 FWA customers. Nonetheless, the company will unveil a “refreshed” FWA service to take advantage of its 120 MHz of C-band spectrum which will cover 200 million POPs by year-end 2023.

The topic came up again as the respective CFOs were speaking at investor conferences following their 4Q22 earnings calls. 

At one conference, AT&T CFO Pascal Desroches in response to a FWA question remarked, “Fixed wireless, in certain cases, [is] a nice catch product where we have a copper customer that we’re [not] going to get to [with fiber] in the next 12 to 24 months. But long term, it’s not a solution we want to put a lot of resources behind. It’s because it’s not a great product, and the customer ultimately is going to reject it. When you look at the amount of bandwidth that is consumed in the home, over time, the customer’s experience is going to degrade. Candidly, we’d much rather take our resources, focus on deploying more fiber. I think our spectrum, long term, provides us with a great opportunity. Let’s not get distracted by chasing empty calories in the near term.”

At another conference, Verizon CFO Matt Ellis countered, “We’ve had critics of fixed wireless. It [already] operates at scale. We’ve got over 1 million customers and growing. It’s not just customers who were underserved before. We’re taking customers from existing providers. I hear that people say we’re going to rip against the wall here, but they’re arguing with the best engineering team in the industry when they make those claims. We feel very good about the runway we have with fixed wireless on 5G technology with the amount of spectrum we have, that we’ll have in place by the end of this year. There’s still significant opportunity, and we’ll have great service for fixed wireless customers and mobility customers at the same time.”

Inside Towers is not taking sides here. It sounds like both MNOs have reasonable FWA arguments for their respective operations. So, where’s the beef?

By John Celentano, Inside Towers Business Editor

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