How crazy is it that traditional broadband providers are seeing record growth in adding wireless subscribers (MVNO services), while carriers are seeing record growth in broadband subscriber adds (FWA or fixed wireless access aka 5G Home Internet or 5G Business Internet)? Should cable broadband operators work up a reseller agreement and sell fixed wireless access as an MVNO?
The industry is clearly showcasing the stronger trust, energy, and value proposition of wireless overall. We are finally seeing the reach of wireless overtake traditional fiber and wireline GROWTH as the industry matures and 5G delivers connectivity options across business and consumer. Fixed wireless access (FWA) is currently seeing a bit of a battle between Verizon and T-Mobile, while AT&T places its bet on fiber after pulling away from a fixed wireless strategy from 2021. FWA is not new and certainly been around for a while as WISPs (Wireless Internet Service Providers) have been serving rural America with these services for quite some time.
Fixed wireless access or FWA in the most simplest terms provides consumers and business with an alternative or complete replacement to traditional broadband services (DSL, Cable, Fiber, T-1s, etc.). Customers can essentially be up and running with a hardware installation at the home or office (radio/receiver, antenna, cat 5 wiring, and connectivity to your WiFi router, etc.). Of course getting access from a WISP versus a carrier will have differing installations based on the nature of point-to-point and multi-directional access. The service essentially provides broadband over the wireless network or over wireless radios that communicate to the base stations or towers. As microcell, small cell, and mmWave technologies improve and enhance, we will see improved hardware and installation strategies impact overall revenue for the carriers and WISPs offering fixed wireless services.
FWA can be seen as an alternative to wired broadband, but today we are seeing both consumers and businesses look to FWA as a complete replacement to their broadband services (T-Mobile shares in a recent report that their customers are replacing cable). While WISPs generally target rural and remote areas where fiber, cable and DSL is not an option, Verizon and T-Mobile for example are targeting cities and suburban areas, as well as the SMB market. In addition to looking at FWA as a alternative or replacement, customers are also evaluating and implementing fixed wireless to complement or provide additional connectivity options (failover) for their homes or business locations. From a branding perspective you may see the services being called 5G Home Internet or something similar. Outside of Verizon and T-Mobile, US Cellular also provides the service to its customers along with many WISPs.
While FWA has traditionally been sold to homes and rural areas, today carriers are targeting businesses more than they have in the past, and the SMB sector is a primary target. There is an estimated 500K total business FWA subscribers today, with an expectation to grow to over a million very quickly as both Verizon and T-Mobile are adding 100s of thousands business customers each quarter. According to Ericsson's most recent Mobility Report, the global FWA market is expected to reach 300 million by 2028 and be driven my international markets, and more specifically India. They claim we will reach roughly 100 million FWA connections globally by the end of this year.
As for the carriers, CompassIntel shares a summary of the key happenings for the top FWA carriers. T-Mobile is currently winning the race and has done a very good job at releasing new FWA business offerings that will provide them with continued runway as they have a very strong customer base of SMBs, who we believe will be more likely to replace their broadband service.
T-Mobile – T-Mobile states they have more than 2M FWA customers, with a goal of 7-8 million FWA customers by 2025. Their most recent quarter net adds totaled 578K and they have experienced continued quarter to quarter growth in 2022. T-Mobile targets both consumers and businesses and recently announced their T-Mobile Business Internet services offering both primary and failover Internet packages. The packages range from unlimited to those based on data ranging from 10GB to 300GB. Their business strategy revolves around a focus on cyclical or temporary businesses, point of sale operations, pop up shops, and hybrid workforces. They will continue to leverage mmWave capacity for enhancements to its coverage and reach.
Verizon - Verizon offers FWA to both consumers and businesses and their business services aka '5G Business Internet' is available at 2 million locations today, and is scaling to 14-25M locations by 2025. Fierce Wireless states that "Verizon’s 5G FWA service is available to about 30 million homes." Today Verizon shares they serve 1.06M FWA customers and have a target of 4 million to 5 million by the end of 2025. Their most recent quarter experienced additions of 342K net adds in Q3 with an estimated 32% of those adds going to business customers or subscribers. Offerings start at 300Mbps and go to 1-gig while they leverage both millimeter wave (mmWave) spectrum and C-Band mid-band spectrum for their coverage.
AT&T – AT&T shifted their focus away from FWA from 2021 to focus more on their overall fiber buildout and strategy. Compass Intelligence estimates AT&T serves an estimated 700K FWA subscribers today.
UScellular – US Cellular currently serves around 57K FWA subscribers on 4G, and is focusing on the expansion of 5G FWA over mmWave spectrum in 10 cities. They claim to have 23% annual growth for their FWA services from 2021 to 2022.
To wrap up, pay attention to the advancements in mmWave and small cell equipment and radio hardware solutions. These advancements will help further improve capacity, installation efficiencies, and better serve business quality broadband services that are needed to help close the digital divide and improve connectivity across the globe.
A few weeks ago, I had the honor to attend the annual Xfinity Analyst Day event in Philadelphia located at both the Four Seasons Philadelphia hotel and the Comcast Technology Center. Thank you to Joel Shadle and team for inviting me and for the insanely wonderful hospitality. As we think about consumer needs and wants, the instant economy demands innovative customer experiences that cater to individual and contextual personalizations, and this is exactly what Comcast is doing with a suite of solutions, products, and services around broadband, WiFi access, Mobile services, and Content. I will share a few highlights of the day's activities below.
Dana Strong, President Xfinity Consumer Services, kicked off the event and shared a great summary of the Comcast/Xfinity innovation journey. Xfinity's primary focus is to push for differentiation around product innovation. It was clear throughout the event that Comcast is fully focused on positioning Xfinity Internet as its primary product; and counts around 26 million residential customers for the service as of Q219, compared to 22 million video customers and 1.4 million Xfinity Home customers. The trio of innovation areas include speed, coverage and control for broadband. Upcoming and new solutions include bringing Hulu to X1 customers in the first quarter of 2020, along with innovation around WiFi with Xfinity xFi Pods WiFi Extenders and a home suite that is fully integrated and searchable by voice with options for adding home security (#smarthome 1.4M home security customers), and innovation around the X1 cloud DVR and remote services. X1 is a platform of platforms with companies such as Cox, Shaw, Rogers all using it as the foundation for their video products.
In addition for homes today, it is all about speed as we are consuming more streaming video than ever. In fact Dana mentioned Xfinity customers used 6 billion video on demand hours along with 9 Billion voice commands in 2018 alone. Innovation is also an area being explored within Xfinity Mobile, where the company serves 1.6 Million mobile lines and is currently expanding LTE with their partnership with Verizon. Family Gig packs (Unlimited and By the Gig packs) or bundles allow payment plans and options to add in home monitoring for existing broadband customers. It is important to understand that only Xfinity Internet customer can get Xfinity Mobile services.
A great amount of innovation is centralized around the entire entertainment experience, which requires robust broadband and tools that can be leveraged with voice automation and an open system with access to services such as Netflix, Xumo, Pluto, Amazon Music, iHeartMusic, Amazon Prime video, YouTube, and again Hulu coming in Q1. Customers can use voice search across the entire ecosystem, not just linear tv, while search results default to free/complimentary and displays where you left off and recommends based on your history.
This innovation around entertainment does not happen without a sound high-speed broadband experience. Tony Werner, President of Technology & Product at Comcast Cable, shared additional innovation details around its broadband and WiFi solutions. With 17 different speed upgrades over the course of 18 years and a strong portfolio of patents with 400 currently pending and 20 million WiFi hotspots, the company is well positioned to leverage these assets to a strong base of residential customers and drive business to the B2B market moving up market from a strong SMB base. A great stat was shared...there are currently 58M homes today that have access to 1Gbps broadband by Comcast today.
Other innovation details shared by Patti Loyack (VP of IP Services) and Rui Costa (VP of Product, Design and CX) include some of the following:
Lastly, I will wrap up by sharing more around innovation specific to customer experience (cX). Charlie Herrin, Chief Customer Experience Officer for Comcast Cable, shared additional details around making the customer experience their best product. He shared four main components to personalized automation (Xfinity Assistant) including IDENTITY, INTELLIGENT AUTOMATION, PROACTIVE 2-WAY DIALOG, and CLOSING THE LOOP. Both self-care and administration are areas where Mr. Herrin is building out services and solutions.
Some highlights include:
These short-list (many others taking place) of improvements have brought about tens of thousands of predictive recommendations produced via IVR for better servicing customers and reduction of calls into the call center, along with billions data elements captured daily. Many customer issues have been contained in the Xfinity Assistant, which has reduced agent handled chats substantially. This customer-first and simplicity approach is sure to enhance the overall customer experience and drive retention for residential clients.
This summary does not include all the interactions and sessions attended, but provides a great review of things to come and the innovation in process and coming down the pipeline. It was clear throughout the event that Comcast is fully focused on positioning Xfinity Internet as its primary product; and counts around 26 million residential customers for the service as of Q219, compared to 22 million video customers and 1.4 million Xfinity Home customers. As part of this analyst day, we were also treated to product demos, Comcast Technology Center Tour, the Universal Sphere experience, and a great networking reception and dinner with showcase labs and interactions with executives. Thank you again to Comcast and the Xfinity team of executives and team who prepared and put this event together. I look forward to witnessing continued innovation and enhancements across the Xfinity portfolio.
Written by: Stephanie Atkinson, CEO of Compass Intelligence
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