Some question the long-term viability of 5G fixed wireless services, arguing that, eventually, it will prove unable to compete with ever-higher capacities supplied by cabled networks, especially fiber to home platforms.
Supporters might make the case that “eventually” is the key phrase, as the market potential for fixed wireless between “today” and “tomorrow” is likely to be quite extended. At the moment, perhaps 51 percent or 52 percent of all U.S. homes or dwelling units have service available from at least one provider.
By 2030 that percentage might increase to 76 percent to 80 percent.
At the moment, perhaps 10 percent to 15 percent of U.S. homes have FTTH service available from at least two providers, growing to possibly 30 percent to 40 percent by 2030.
For starters, FTTH is expensive enough that no single service provider can afford to build new networks ubiquitously, even if the customer demand is present. By some estimates, the cost to pass one urban home might be just $1,000, but the cost to pass suburban locations might range up to $3200, while rural passings can easily cost $7,000 or more.
And that is construction cost only, not including the cost to activate an account, which can add costs between $300 to $500 for each install.
An equally-important issue is the take rate for such networks. It has been common for any new FTTH provider that is a telco to get up to 40 percent take rates over a few years, with initial uptake in the 20-percent range, often. Independent ISPs competing with both cable operators and a telco might expect take rates not exceeding 20 percent (where the cable operator can offer gigabit service and the telco does not offer FTTH).
So the longer-term issue is how big the market might be for wireless service offering speeds in the lower ranges (100 Mbps to 200 Mbps now; undoubtedly higher speeds in the future), as more fiber access is available. To the extent that fixed wireless is taking market share from cable operators (perhaps even operators able to sell gigabit-per-second connections), we can infer that a substantial portion of the market is happy to pay the prevailing rates for access at such speeds, especially when able to bundle home broadband with their mobile access services.
When comparing fixed wireless to either cable modem or FTTH service, many consumers might not be especially interested in services operating the 500-Mbps and faster ranges, much less gigabit ranges, when the slower speeds cost less.
But demand will continue to shift over time, with most consumers eventually buying services operating faster than 200 Mbps, and in many instances much faster than 200 Mbps (gigabit to multi-gigabit ranges, for example). To be sure, fixed wireless providers are likely to find ways to increase their speed tiers as well, beyond 200 Mbps in the future, even if virtually all observers suggest wireless will continue to lag cabled networks in terms of speed.
Perhaps the best analogy is what cable operators have been able to do with their hybrid fiber coax networks, boosting speeds over time.
Keep in mind that cable networks and FTTH networks back around 2000 were only offering top speeds in the 10-Mbps range. Fixed wireless networks also will be able to increase speeds over time, if never on the scale of cabled networks.
But absolute ability to match cabled network speeds is not the question. The issue is what percentage of customers will, in the future, be willing to buy fixed wireless home broadband, at then-prevailing speeds, prices and offers.
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