Why Fixed Wireless Access Matters for Continued Cellular Growth
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In a previous post I covered what Fixed Wireless Access is to help inform consumers and the general public about the need for rural internet access or alternate internet access methods. Like most industries there is either a single company with a stranglehold on the market or there is what is called a two-horse race in which only two large competitors are at war for your dollar, there are smaller companies still existing but they pose no threat to the two rival companies.
The internet service provider industry is most like the first instance. You have a large single company like AT&T, Verizon, Cox, Spectrum, and Charter who cover large areas but do not always compete directly, especially not in rural areas where we are focusing our attention on. This leaves consumers in a pickle when they want high-speed reliable internet connectivity. Most rural subscribers have a choice between a single provider or they must use satellite or their mobile phone hotspot. This is exactly why Fixed Wireless Access (FWA) matters, it is not a make due solution, it is a true solution to a growing need.
Fixed Wireless - The Battle For Consumer Dollars
Unlike cable internet providers the FWA market is young and the fight for consumer dollars is only just heating up. Based on research by BroadbandNow there are an estimated 453 cable internet providers but FWA providers total 1,792 which is almost four times as many options to consumers. Competition in FWA is healthy and will remain so until maturity which could be 20-25 years from now. For now we are still trying to figure out what FWA truly looks like. Companies know consumers need viable alternatives to traditional terrestrial solutions like DSL and Cable. These solutions must be competitive in case a company does decide to drop millions of dollars running new line in to rural areas. If the service is not comparable, customers will leave for speed and stability benefits.
Cellular Service Providers want consumer dollars in the FWA market, it's young, it has amazing growth potential, and many people are leaving cities for rural areas which continues to increase the amount of customers they could acquire.
Fixed Wireless Benefits - Three Huge Positives
Lower Cost-to-Serve
I have mentioned how incredibly expensive it is to run fiber-to-the-home (FTTH) in the past because fiber can cost $60,000-$80,000 per route mile. That does not include the "drop" which is the connection from the main line to the residential home which varies based on the length of the drop itself.
In comparison a cell site can cost on average $250,000 but in some cases that price can reach $2M depending on the deployment. Even with a wide range that average cost allows a company to service more customers over a larger area than FTTH. Additionally carriers just need to add radios to existing sites more often than not, they do not need to build new sites just for FWA. A single site can cover hundreds of mobility users and many FWA users. This does not count transient revenue that the site generates for roamers using its resources.
Streamlined Deployment
Once a site has been built and ready for service the deployment of FWA units to residential homes is much simpler than the rollout of FTTH. Installs do not require a technician spending hours to install equipment or the cost of a truck roll which can be prohibitive.
Most home users can self-install and be running in less than 30 minutes. FWA is offered in both an indoor solution that looks like a traditional modem/router combination.
However, in more terrain challenged areas a tech doing an installation is more common because they may need to use an outdoor unit that requires J-pole mounting and drilling through the home wall to run ethernet in from the outdoor unit.
Network Efficiency
Network efficiency can get down right nerdy and we need to go there to understand why smaller carrier can leverage cost savings to make FWA more profitable.
Rural carriers can invest in virtualizing their network where traditional networking hardware is reduced to virtual machines that handle the same applications but in an almost instantly recoverable platform. This means that generic servers can handle load balancing, firewall security, routing, voice service and more instead of hardware networking components. I'll write on more on Network Function Virtualization in the future.
Another efficiency gained is through software-defined networking that can leverage a software heavy environment to provide RAN economic efficiencies and perform network optimization with a more simplified connective environment.
Fixed Wireless Favors Smaller Carriers
If there is one thing I have learned about working with a rural carrier for so many years, it is their tenacity. Rural carriers cannot compete in the same way that the big three do. So they must determine HOW they will show they are different. This is done in several ways that really do position their network to benefit the most from FWA.
- Rural Carriers fight for every bit of spectrum in their base areas. This is important especially as C-Band is offered by the FCC. Having a strong spectrum portfolio even in a smaller area means that it is more difficult for larger incumbents to penetrate your core market.
- Rural Carriers provide better customer service. This is vital to keeping customers loyal to their brand. Every customer matters to the bottom line and focusing on exceptional, local, customer service will mean a world of difference to rural consumers.
- Rural Carriers genuinely care about their base. Customers of rural carriers feel more related to because they know they have the home team on their side when they have concerns.
FWA allows rural carriers to provide a meaningful service to their market. During the COVID-19 Pandemic the amount of people needing connectivity in rural areas skyrocketed because parents worked from home, students worked from home, doctors worked with patients from online services. This shone a heavy light on why the Digital Divide needs to be closed. There are 27.6 million potential customers out there for rural carriers to capture and their local service, their tenacity and hopefully their well-built FWA program makes them uniquely positioned for success.
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