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28 March 2019

USA’s fixed wireless battle spreads to mid-sized operators

Until recently, fixed wireless access (FWA) was a niche business model in the USA, confined mainly to local operators offering broadband services via WiMAX, souped-up WiFi or LTE to rural and other underserved areas.

In the brief ascendancy of WiMAX, there was much talk of how a single wireless subscription could support both home broadband and mobile usage, with proprietary products such as Motorola’s Canopy being migrated to the new platform in the hope of stealing a march in 4G. But WiMAX was sidelined, and neither 4G standard had sufficient spectrum capacity or speeds to compete with fiber, where that was economic to instal. Equipment from companies like Airspan continued to support rural deployments, and the big operators, particularly AT&T, have used fixed LTE to replace some DSL lines at the edge of their territories.

But only with 5G is there a realistic prospect of operators being able to deploy in competition with fiber. In the case of Verizon, that will help it expand its limited fiber territory. The same is true, to a small extent of AT&T, though that operator’s fixed 5G launch has been mainly about getting into the market as quickly as Verizon, before mobile devices are available. Its core strategy is firmly fixed on mobility, and on 5G links with sufficient capabilities to support fixed usage in the home too (not necessarily with special FWA CPE); and an early move forward to industrial services.

But the fixed wireless race is no longer just about these two giants and some specialized WISPs. T-Mobile has been gearing up for a big assault on the home market with plans for 5G-based TV and multiplay services (some of them contingent, it tells the FCC, on being allowed to acquire Sprint and gain all that MNO’s plentiful 2.5 GHz spectrum). Now it has released details of a planned 4G-based FWA offering, which will be positioned less against Verizon than the mid-sized US operators, notably US Cellular; as well as the cablecos, which have been using WiFi to extend their services into the multiplay for several years.

Despite the similarity of TMO’s new service to existing offerings, it is positioning it, in typical Uncarrier style, as the start of “home broadband disruption”, and particularly, as an attack on “Big Cable”.

TMO also hopes its LTE FWA plans will strengthen its case for the merger with Sprint. The company’s 4G and 5G strategies rely heavily on achieving universal coverage more quickly than rivals, leveraging its major investment in 600 MHz spectrum (with its excellent propagation qualities) for 5G. But it needs Sprint’s higher band airwaves to add capacity to its services and enable fiber-like speeds.

In its statement announcing its fixed LTE pilots, TMO said: “Due to LTE network and spectrum capacity constraints, the T-Mobile Home Internet pilot is limited by invitation only to existing customers in specific areas, with the goal of reaching 50,000 households by the end of the year – or slightly less than 0.04% of U.S. households. But if T-Mobile’s pending merger with Sprint is approved, with the added scale and capacity of the New T-Mobile, the Uncarrier plans to cover more than half of US households with 5G broadband service – in excess of 100Mbps – by 2024. And Americans stand to save billions.”

For now, the planned service looks little different from the rural-centric offerings already in the market. TMO is starting to invite selected customers in rural areas and will expand the trial to 50,000 households by the end of the year. It promises unlimited, uncapped home Internet access at an average of 50Mbps for $50 a month, based on a self-install home LTE router which supports WiFi devices. It also promises the service would come with no annual service contracts, hidden fees or upfront equipment costs.

But if it were able to use Sprint’s spectrum, it has told the FCC it could offer average speeds over 100Mbps to 90% of the country by 2024, with a path to 5G, and that it would target 10m in-home Internet customers to the service by 2024. Such arguments are designed to persuade the regulators that a merger would not reduce consumer choice by removing one MNO, but would provide a wider choice of affordable services, especially to those in areas where there are only one or two active operators anyway.

In fact, the offering is similar to US Cellular’s Home Internet offering, launched last summer in areas of its rural 4G footprint where it has excess capacity. The company operates in parts of Texas, Washington State, Maine, Kansas, Nebraska, Iowa and Tennessee. Its fixed wireless service costs $40 for 20GB of data a month, $50 for 50GB, $70 for 90GB, and $100 for ‘unlimited’ (capped at 160GB). The fifth largest MNO plans to expand its service this year, using an outdoor receiver to equip homes which are not suitable for the indoor router, or which would get far higher speeds with an outdoor unit.