5G FWA success in USA yet to be seen in India

5G Fixed Wireless Access (FWA) has emerged as a transformative use case driving the widespread deployment of 5G technology. Since 2018, many markets around the globe have embraced 5G FWA services, with the U.S. leading the charge. By analyzing the evolution and impact of 5G FWA services in the U.S., Opensignal provides valuable insights and conclusions that can guide and inform other global markets embarking on their own 5G FWA journeys.

Key Findings:

• 5G FWA has reshaped the US broadband market. It has allowed U.S. mobile operators to rapidly expand their broadband footprints for minimal incremental network investment. This has seen 5G FWA absorb all broadband subscriber growth in the market since mid-2022.
• FWA is the secret sauce for 5G monetization. FWA benefits from lower prices compared to wireline competition, access to existing mobile retail channels and subscribers, and the ability to deliver a “good enough” broadband service.
• U.S. mobile networks have proven to be resilient. Despite adding millions of 5G FWA subs since 2021, 5G speeds on T-Mobile and Verizon’s mobile networks have continued to improve. Their success in managing FWA traffic is due to a variety of factors, including plentiful access to mid-band spectrum, localized load management, and differences in peak usage time of day patterns between mobile and FBB usage.
• Elsewhere, there are mixed results. In India, Jio is seeing no discernible impact from FWA on the mobile experience of its users, while in Saudi Arabia Zain is seeing the additional load on its network from FWA having a greater influence on mobile users’ experience, depending on the time of day or the level of FWA penetration.

The evolution of FWA with 5G
FWA is not a new concept in the telecoms industry — FWA services have been quite common worldwide for decades, with many 4G-based networks available for over a decade. However, the arrival of 5G means huge improvements in the quality of network services. This is largely due to 5G FWA’s improved spectral efficiency compared to previous 4G or proprietary technologies like WiMAX. This is due to several improvements in signaling and the customer premises equipment (CPE) used for 5G FWA, enabling the use of:

• Massive MIMO (multiple-input multiple-output) — a wireless network technology that allows the transmitting and receiving of more than one data signal simultaneously over the same radio channel
• Beamforming techniques that allow a wireless signal to be focused toward a household’s modem, resulting in improved signal and reduced interference
• A sound reference signal that allows the modem to switch between beams to optimize its signal.

Given these improvements, it is no surprise that 5G FWA offers a significantly better experience than its predecessors. Our recent analysis of 5G FWA in Italy demonstrates just that. When using 5G FWA, our Italian users see twice as fast download speeds, three times faster upload speeds, and enhanced consistency when compared to the overall FWA experience.

These improvements make 5G-enabled FWA services a highly competitive value proposition for broadband subscribers. 5G FWA rollouts are also an important first step for mobile operators to monetize their substantial investments in 5G spectrum and infrastructure.

5G FWA services have reshaped the U.S. fixed broadband market
5G FWA services have been on a dramatic growth trajectory in the U.S., absorbing all broadband subscriber growth in the market since mid-2022 and amassing more than 600-700 thousand net adds per quarter. This is despite the USA being a mature broadband market with nearly 97% broadband adoption and modest household growth.

Key players and their strategies
The two primary FWA players in the U.S. are Verizon and T-Mobile.

• Verizon introduced 5G Home Internet in 2018 on mmWave, expanded to the rest of its 5G network in 2022, and now has more than three million customers.
• T-Mobile launched 5G Home Internet available to 30 million households in 2021 — out of 127 million households in the U.S. — and has since amassed more than five million subscribers as of Q1 2024.

For both operators, 5G FWA has been an opportunity to compete for fixed broadband subscribers without making massive investments to build widespread wireline broadband infrastructure. While T-Mobile has only just acquired Lumos, which gives it access to more fiber infrastructure, Verizon’s fiber network is limited to the Northeast. AT&T recently entered the market as well, but on a more limited basis, as AT&T is in the midst of a multiyear campaign to upgrade nearly half of its 60-million homes-passed footprint to fiber.

The rapid development of 5G FWA networks in the U.S. has intensified the level of competition in the fixed broadband market. Based on Opensignal’s observation of FWA Wi-Fi networks, the percentage of housing units that are passed by two or more high-speed broadband providers (either cable, fiber, or FWA) has increased from 50% in Q1 2022 to 78% in Q4 2023, translating into an increase of nearly 40 million homes.

The evolution of FWA: from rural solution to mainstream competitor
Historically, FWA has been positioned as a way to close the digital divide in underserved rural areas, where deployment of other types of fixed broadband services would not be commercially viable. Such is the case in many emerging markets, like Angola, South Africa, Nigeria, and Zimbabwe, where 5G FWA solutions provide the ‘last-mile’ connectivity without laying down cables or fiber, especially in more remote areas. But as the U.S. is proving, the business case for urban deployment is just as strong.

Mainstream adoption in urban areas
In the U.S., FWA has become a highly competitive mainstream option in well-saturated urban markets. FWA is nearly as popular in urban areas as in rural ones, as FWA providers have so far claimed around 6% of the market in urban areas and 7% in rural ones.

Competitive pricing and consumer preferences drive 5G FWA growth
The reasons for this growth are multi-faceted. Both T-Mobile and Verizon offer highly competitive pricing, especially for existing mobile customers. Both operators have massive mobile customer bases to sell into, with T-Mobile claiming 76 million postpaid phone customers and Verizon having 92 million. For these mobile customers, fixed wireless broadband pricing significantly undercuts the rack rate prices (base prices with no discount applied) that most households pay today for cable.

The Opensignal U.S. Household survey shows nearly three-quarters of FWA subscribers pay less than $75 a month for their broadband services, compared to only 60.4% of cable subscribers. Additionally, 66% of FWA subscribers consider their pricing plan as fair — which is significantly higher than in the case of other types of fixed broadband technologies, according to a survey conducted by Parks Associates.

We have also found that FWA is particularly popular among younger consumers — according to the Opensignal U.S. Household Survey, more than a third of FWA adopters are below the age of 35, compared to only a quarter of cable subscribers.

Younger customers are both likely more open to newer technologies and comfortable with the ease of self-install. In the U.S., customers can walk into any of the thousands of T-Mobile and Verizon retail stores, pick up a router, and set it up from home via an app. This ease of use, combined with the ability to relocate the router easily, makes FWA an attractive option for the generation of cord-cutters.

Mobile networks remain resilient despite the presence of FWA services
Despite adding more than eight million 5G FWA subs using 400+ GB per month of data since Q1 2021, the overall mobile network experience on T-Mobile and Verizon’s mobile networks has not been compromised.

On the contrary, their average 5G download speeds have almost tripled since Q1 2021, when T-Mobile started reporting on its FWA subscription numbers, and have seen gradual and steady quarterly increases.

But speeds tell just a part of the story and don’t fully represent actual user experience. Opensignal compared how consistent FWA and mobile services are on T-Mobile and Verizon’s networks, depending on the level of FWA penetration across U.S. Metropolitan Statistical Areas (MSAs). We would expect low-FWA penetration areas to see better mobile and FWA performance because of less load on the network. However, our data demonstrates the opposite trend — high-FWA penetration areas scoring better for mobile and FWA performance than low-FWA penetration ones. Looking at Opensignal’s Consistent Quality metric, performance in high-FWA penetration areas is also better than the overall performance for both T-Mobile and Verizon’s FWA and mobile services.

The biggest reason T-Mobile and Verizon have been able to successfully manage this additional traffic is the huge swathes of mid-band spectrum they acquired via the Sprint acquisition (2020) and C-Band spectrum auction (also 2020), respectively. The ability to roll out new types of services like 5G FWA supported by the acquired spectrum has opened opportunities for new revenue streams, which partially provide a return on heavy investment in spectrum licenses.

Both T-Mobile and Verizon have licenses for more than 150MHz of contiguous mid-band frequencies — averaged to the national level, as the FCC has assigned spectrum licenses to mobile operators on a regional basis. While AT&T has nearly the same total level of spectrum depth as Verizon, its lack of contiguous spectrum limits its ability to maximize efficiencies in load-balancing between mobile and FWA traffic.

In addition to this infrastructure advantage, T-Mobile and Verizon have network management policies that limit the stress broadband traffic places on the mobile network. T-Mobile manages access to new customers at a highly localized, sub-cell-site level, depending on capacity utilization in their neighborhood. T-Mobile has also recently implemented a “soft cap” on FWA usage of 1.2TB. Verizon revealed last year that it also manages availability at a sub-cell-site level.

Before launching at a national scale, both T-Mobile and Verizon launched limited trials of 5G FWA, to test out on a smaller scale their go-to-market pricing and capacity management techniques — and then they gradually extended their footprints. T-Mobile piloted LTE home internet first in a minimal footprint of 50,000 households in 2019, with a focus on rural and underserved markets. The provider then expanded LTE FWA services to 20 million households in 2020, followed by a launch of 5G FWA services that cover around 30 million households (including 10 million in rural areas) — and T-Mobile has incrementally expanded its footprint since then.

Verizon first trialed its 5G FWA services over mmWave in several cities (Houston, Indianapolis, Los Angeles, Sacramento) in 2018, followed by deployments in Chicago in 2019. Verizon then went on to roll out LTE FWA in rural areas, in response to the need for rural connectivity during the COVID-19 pandemic — and in 2022, it launched 5G FWA over the C-band in early 2022 when the frequencies became available for mobile use.

FWA experience outside of the U.S. — Saudi Arabia and India case studies
U.S. 5G FWA experience serves as a north star for operators. Still, its success has been due to a perfect storm of competitive pricing against wireline competition and the ability to sell into large mobile subscriber bases through leveraging the mobile retail channel. While a handful of markets around the world launched 5G FWA in 2018, most global markets have launched since 2021 and to this day, almost all of Europe and several markets in the Americas, Asia Pacific, and the Middle East have seen 5G FWA deployments. 5G FWA has been deployed in African markets as well, even ahead of 5G mobile services in some cases, to narrow the digital gap and deliver a ‘last-mile’ connectivity proposition.

Opensignal took a closer look at two interesting case studies of successful 5G FWA deployments by Zain in Saudi Arabia and Reliance Jio in India. Both operators have rapidly scaled their FWA services by leveraging their large mobile subscriber bases, similar to T-Mobile and Verizon in the U.S.

While Zain launched its national 5G FWA network in 2019 almost at the same time as its 5G mobile network services, Jio started offering the 5G FWA services much more recently, in September 2023. Both operators have launched 5G Standalone Access and have comparable spectrum holdings. Zain holds 100MHz in the 3.5GHz band across the whole of Saudi Arabia. India’s licenses are awarded at a regional level, ranging from 100MHz to 130MHz, so in some areas, Jio has access to 30% more 3.5GHz band spectrum than Zain.

A challenger approach — Zain introduced FWA to get into the broadband game
Zain used FWA as a strategic tool to disrupt the fixed broadband market, given its lack of owned fiber infrastructure and its reliance on the open access initiative to offer fixed broadband services. In the first three years, its 5G FWA customer base grew eightfold, while the 5G traffic ratio to total mobile traffic reached 38% in January 2022. Most importantly, Zain recorded a 30% increase in ARPU for wireless home customers in the comparison of 4G to 5G.

Looking at the time of day analysis for Zain, we observe higher discrepancies between mobile and FWA Consistent Quality in the morning and afternoon. However, these gaps narrow in the evening, with mobile Consistent Quality decreasing at a higher rate than the FWA one. This is paired with a higher proportion of FWA readings around that time as well. As more subscribers connect to both mobile and FWA from their homes in the evenings, this means a higher load across the network and decreased consistency of mobile services.

We have also looked at how Zain’s network performs in low-FWA-penetration areas vs. high-FWA-penetration areas to see if a higher FWA load is affecting mobile performance. We observed substantially declining Consistent Quality scores for both FWA and mobile services for Zain in areas with higher FWA penetration. This is contrary to what we saw for T-Mobile and Verizon in the U.S.

Zain’s early start with 5G FWA has enabled it to achieve significantly greater market penetration than Jio, T-Mobile, or Verizon. As of February 2023, Zain reported 1.1 million FWA subs and approximately eight million mobile subscribers, resulting in a far greater ratio of FWA-to-mobile subscribers than the above-mentioned operators.

However, the rapid growth in FWA penetration has likely strained Zain’s network performance, resulting in decreased performance for both mobile and FWA services in areas with higher FWA subscriber density. To address these challenges and support continued growth, Zain recently announced plans to invest SAR1.6 billion ($427 million) to expand its 5G network. This expansion aims to extend 5G coverage to 122 cities across Saudi Arabia, increasing the number of 5G network sites to over 7,000. Nearly 45% of this new expansion will support 5G-Advanced (5G-A) technologies, focusing on accelerating deployment from 2024. The operator launched 5G-A services last year, with the initial launch taking place in the capital of Riyadh, to offer differentiated FWA 2.0 services based on Red-Cap technology.

Expanding broadband coverage to underserved areas — the Jio AirFiber approach
Jio, a newer entrant in the 5G FWA space, introduced its fixed wireless offering (AirFiber, in 2023). Jio’s goal is to expand the broadband offering to new customer segments, including those in more remote areas. The addressable base for Jio AirFiber is coming from Tier II towns where “…demand has been the greatest. But reaching optical fiber to those towns has been time-consuming”. The most basic Jio AirFiber plan, priced at Rs 599 (around US$7) comes with 30Mbps for 30 days. Every Jio AirFiber and AirFiber Max plan includes a Wi-Fi router at no extra cost. Irrespective of the Jio AirFiber plan you opt for, the company charges Rs 1,000 for installing an outdoor unit which is a crucial component for gaining ultra-fast internet speeds. However, this fee can be waived off in case you opt for an annual payment.

Throughout the day, both FWA and mobile Consistent Quality scores are closely aligned. In the evening, the difference between FWA and mobile scores narrows, coinciding with a higher proportion of FWA readings. Contrary to Zain’s example, Jio’s Consistent Quality scores between low- and high-FWA penetration areas are more aligned for FWA and mobile.

As Jio deployed 5G Standalone Access services, it has used a dedicated network slice to provide 5G FWA services — which helps with managing the network congestion, even though the average AirFiber user consumes around 400GB of data per month. This will help in the longer term, as the operator aims to reach 100 million connected premises in India with its FWA offering. One demonstration of Jio’s confidence in its network’s capacity is its recent launch of a streaming plan that includes 15 streaming apps with fixed broadband packages, highlighting its ability to handle the additional load coming from video streaming. Looking ahead, Jio’s main competitor, Airtel, is also preparing to deploy 5G FWA Standalone Access services.

CT Bureau