Consumers, operators and governments drive Fixed Wireless Access market

Over the course of 2023, as the 5G communications industry evolved into a phase of maturity, fixed wireless access (FWA) deployment has been attracting increasing interest for service providers and enterprises alike, and a study from Rethink Technology Research has confirmed this growth, as three key parties act in harmony in response to rising demand and improved technology capabilities.

First of all, in the Fixed wireless access market forecast 2022-2030 report, the analyst says consumers in areas unserved or poorly served with wired broadband around the world are demanding broadband services more comparable with those offered to their urban peers, and these can now be provided increasingly by FWA.

In addition, it says governments, in turn, want to reduce digital divides, and many have been offering incentives for digital levelling-up to remove deficiencies in rural areas. FWA is increasingly regarded as one element of the broadband candidate technology mix for underserved communities.

Lastly, mobile operators are interested in the potential for new revenue streams or services that can exploit unused spectrum. In developing nations, as well as some parts of developed ones, FWA has emerged as the most economical option for extending broadband services to users previously denied internet access at acceptable speeds, or at all.

The other crucial factor observed by the analyst is that cellular networks have almost caught up with the curve of ever-rising broadband expectations for performance and reliability. In its report, Rethink noted that in developed economies this is usually in the range of 30Mbps to 60Mbps, rising to 100Mbps or more over the coming years.

Even though it had no doubt that FWA would be a major source of new revenue for operators globally over the next seven years, Rethink pointed out that there would be sharp regional variations. It calculated that APAC will drive substantial FWA subscriber growth while Europe remains the leading region for revenue generation, with significant developments in Africa and Latin America in vast rural areas unserved by fixed broadband.

The study highlighted the market lead of the US through rapid rural FWA subscriber growth, which Rethink believes will continue for several years and ensure the country is well ahead of others for revenue generation. Yet, it adds that as saturation approaches in the US, populous APAC countries led by China and India will no less than “roar ahead” in subscriber numbers.

Rethink sees the dichotomy between revenues and subscribers as reflecting stark differences in monthly ARPU generated by FWA, as for broadband services generally, ranging from $54 in the US to an average of $7 for APAC as a whole, and barely $2 in India.

The analyst regards such low ARPUs as posing a challenge to operators by themselves, meaning that fibre broadband networks can only penetrate deep into rural areas with the help of government incentives. It added that low ARPUs can also make FWA an attractive proposition for operators as an additional revenue source, with opportunities for follow-up added value services such as video and cloud gaming.

Overall, the study predicts that APAC will surge ahead over the next seven years for FWA subscriptions, with Europe a poor second, followed by Africa and Latin America as rural deployment ramps up in some countries there. North America is projected to subside into last place regionally, despite the US enjoying strong growth currently.

In terms of FWA revenues, the picture is different. Europe is set to take a strong lead, with 35% of the global $62.9bn in 2030, followed by North America on 24% and APAC only third on 16%, reflecting the expected low ARPUs in the region.

Technologically, another significant FWA trend over the forecast period will likely be a transition from 4G and non-3GPP approaches to 5G-based ones. Again, Rethink regards this as likely to vary considerably on a global basis, with almost all FWA 5G by then in the US, about half in some developing nations in APAC, such as the Philippines, and only about 22% on average in Africa.