Fixed wireless has emerged as the clear producer of “new revenue” for 5G networks. At least for the moment, FWA seems to be crimping cable operator home broadband net additions.
In the third quarter of 2022, for example, Comcast added 14,000 net new subscribers. T-Mobile, using FWA, added 578,000 net new accounts. Verizon’s FWA service added 342,000 net new accounts, according to Leichtman Research Group figures.
Legitimate questions can be asked about how long that trend can last, as most observers would agree that FWA appeals mostly to customers without significant need for, or desire for, the faster services. In other words, for a significant portion of the market, speeds up to 100 Mbps to 200 Mbps are good enough.
But that is not the whole market. In the third quarter of 2022, for example, it is possible that a quarter of all customers, perhaps as many as half, only “needed” speeds up to 200 Mbps. Only about 15 percent of households bought service at 1 Gbps or faster.
At some point, the “lower-speed is good enough” segment will be saturated. At that point, Verizon and T-Mobile will have to do the same thing as Comcast: boost speeds for existing customers and those who want higher speeds.
Cable executives predictably expect that FWA will not be able to keep up. Verizon and T-Mobile obviously say they disagree, and that they will be able to keep boosting FWA speeds.
At the moment, Comcast’s strategy seems to acknowledge the new competition, as it no longer says it will grow home broadband revenue by increasing market share or the number of subscriptions, but rather by upgrading speeds to faster tiers that cost more.
Competition from fiber-to-home providers is the other part of the market dynamic, as more FTTH is being activated by many ISPs, competing with the fastest of cable home broadband speeds.
For all those reasons, cable’s revenue growth hopes likely hinge on taking greater share in the mobile phone business.
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