Fixed Wireless Dominates U.S. Home Broadband Net Additions in 2Q

With the caveat that nobody knows how long the trend will hold, in the second quarter, home broadband account additions in the U.S. market were dominated by fixed wireless, according to the latest data from Leichtman Research Group. 

Of 841,000 net account additions, 893,000 accounts were added by fixed wireless providers. In other words, fixed network provider accounts actually declined, while fixed wireless grew. 

Skeptics always argue that, eventually, fiber connections will limit fixed wireless demand. Fixed wireless optimists tend to argue that enough capacity can continue to be added to sustain fixed wireless as a viable market offering for quite some time, and perhaps almost indefinitely in a percentage of markets. 

The business strategy would be to continue upgrading fixed wireless speeds, for example, to appeal to 20 percent of the market. In that scenario, the objective is not to match fiber-to-home speeds but only to support features most relevant for about 20 percent of the market that does not want to buy the fastest, or faster, tiers of service. 

In terms of geography, rural areas and out-of-region locations are likely to remain the places where fixed wireless makes most sense. In such geographies the cost to supply will be far lower than the cost of building new optical access networks. The leading exceptions might be markets where FTTH leased access is generally available. 

In the near term, new mid-band spectrum is likely to provide the needed capacity expansion. Long term, millimeter wave spectrum will be the key supplier of capacity growth. To be sure, small cell networks using low-band and mid-band spectrum will help, in some cases. 

Still, longer term, only millimeter and higher frequency spectrum will add enough capacity to allow fixed wireless offers to keep pace (again, preserving key appeal for about 20 percent of the market) with other fixed network alternatives. 

The big advantage of milliwave spectrum is capacity; the main drawback is coverage. That will pose a continuing issue for rural millimeter wave network deployments. The conventional thinking is that denser urban markets are where millimeter will continue to offer the most-interesting business cases: relatively high amounts of capacity in areas where distance is not a primary issue. 

 

source: ABI Research, RCR 

At least so far, fixed wireless has been, far and away, the clearest new use case for 5G.