Increasingly, telcos like Verizon and T-Mobile are moving into territory that has traditionally been occupied by internet providers.
Their tool of choice? 5G fixed wireless access (FWA), which uses radio frequencies to deliver a broadband connection. In the pre-5G era, relatively low speeds meant that FWA often wasn’t a viable alternative to broadband in many cases, but the introduction of C-band 5G spectrum at the start of 2022 opened the door for faster connections—and kicked off a new era in the broadband industry.
Leichtman Research Group (LRG) found that the number of new US FWA subscribers added by T-Mobile and Verizon more than tripled from Q3 2021 to Q3 2022, rising from about 190,000 to 920,000 subscribers. As of November 2022, the top broadband providers accounted for 110 million broadband subscribers in the US, per LRG, while FWA made up only a small chunk of that total—around 3.2 million subscribers.
And although growth returned in the following quarter, Q2 2022 was the first time that US cable giants Comcast, Charter, and Altice posted a quarterly loss in broadband subscribers, according to LRG, a decline some analysts attributed to competition from 5G FWA.
While FWA represents a potential challenge to legacy broadband providers, Mike Dano, editorial director of 5G and mobile strategies at Light Reading, told us that “pretty much everyone agrees that [fixed wireless] is not a permanent threat.”
“What you’re seeing right now is they stood up those fixed wireless businesses. They got a bunch of customers they made sort of a big crashing impact into the cable industry during the course of 2022, but now they’ve discovered that they’re well on their way to reaching their goals, meaning that they’re well on their way to filling up their network capacity that they’ve allocated to this business,” Dano said.
New connections
At their core, fixed wireless access networks are a simple redirection of wireless signals, which means that telcos often don't need to build new infrastructure to create them.
“Just imagine a pipe that runs from a cell tower to your smartphone,” Dano said. “Now you just take that same pipe, but you point it at a special receiver inside of your house.”
Kaley Gagnon, VP of marketing at T-Mobile, told Emerging Tech Brew that the company expects to reach its goal of 7 million–8 million FWA customers by 2025, up from the 1.7 million FWA customers it reported adding between Q4 2021 and Q3 2022.
Keep up with the innovative tech transforming business
Tech Brew keeps business leaders up-to-date on the latest innovations, automation advances, policy shifts, and more, so they can make informed decisions about tech.
“Our biggest challenge…is building awareness that consumers have a new alternative, and that it is a great product and a great experience,” Gagnon said.
Sowmyanarayan Sampath, CEO of Verizon Business, told us that as of Q3 2022, Verizon had over 2 million fixed wireless customers. The company expects to have 4 milion–5 million FWA customers by the end of 2025. Verizon added 342,000 new customers to its fixed wireless business in Q3 2022 alone, up, uh, more than 522% year over year.
But ISPs are making moves too. For one, Dano said some are upgrading their networks, or even offering their own smartphone services—sort of an inverse of what the telcos are doing with broadband. Comcast, for example, announced in October 2022 that its Xfinity Mobile service had surpassed 5 million customer lines in five years.
Comcast and Spectrum have also released resources claiming that FWA encounters major slowdowns in service during peak hours. Verizon CTO Kyle Malady recently told investors that broadband customers rarely use “the full two gigabits of max capacity at any given time,” referring to the speeds as a “marketing game.”
According to Evercore research reported by Fierce Wireless in February 2022, FWA service is generally slower than both cable or fiber broadband.
But fixed wireless networks may face a natural ceiling. Both Verizon and T-Mobile have made statements claiming that they have the capacity to grow their fixed wireless businesses, but some questions remain.
For its part, AT&T—one of the nation’s largest ISPs and telcos—recently reported having over 500,000 fixed wireless customers, Michael Delgado, lead communications and PR manager at AT&T told us in an email statement that in areas where it has “robust 4G or 5G wireless coverage,” fixed wireless “can serve as a backup service, if needed.”
“We’re considering ways our fixed wireless services can fill in pockets as a catch product for our copper footprint and hard-to-reach areas for some customers,” Delgado said. “But fiber remains our focus.”