Monday, September 28, 2020

Why U.S. Mobile Operators and Some Telcos are so Big on 5G Fixed Wireless

“Fiber is the network of the future, and always will be,” I once heard an engineering executive quip back in the 1980s. Though not literally true, the statement was a reasonable summation of the business context within which fiber to premises networks are deployed. Put simply, the business case is strongest when only one network can be built, while other platforms, even when built, have some performance or cost issues.


Consider this older analysis of fiber to home payback. Analysts at Delta Partners Group noted that in countries where governments have intervened with financial support in the FTTH market, including Japan, Lithuania, Malaysia, Portugal, Singapore, South Korea and the UAE, homes passed range from 47 percent in Sweden to 95 percent to 96 percent in South Korea and Lithuania. 


More important are take rates. There is relatively quick payback when consumer buy rates are in the 45 percent to 81 percent range, for example. In the U.S. market, where Verizon has deployed FTTH, it has only relatively recently gotten to a bit over 40-percent adoption, after 13 years of marketing, which is literally “off the charts” in this case. 


Delta Partners Group 


The problem for U.S. telcos is that rival cable operators have 70 percent of the installed base and have led in market share (net new additions every year) for two decades. Mobile operator interest in 5G fixed wireless is precisely that it offers a platform with different economics.

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