FWA Update
Mobile communication has become an increasingly important part of human existence, with mobile data traffic growing at a 27.2% CAGR[1] between 2019 and 2028. That traffic will increasingly be using 5G technology, and while this year saw a slowdown in 5G expansion on a global scale, as an inflationary cycle stunted carrier expansion, over that same period 5G mobile data will see a CAGR of 67.4%. While, as consumers, we are used to the characteristics of 2G, 3G, 4G, and more recently 5G mobile communication, those same transport protocols and networks can also be used for FWA, or Fixed Wireless Access, the wireless equivalent to copper or fiber typically used to connect residential or commercial customers.
FWA, in most cases, is based on 3G or 4G technology, with relatively new 5G services piggybacked on existing infrastructure (NSA 5G), but as 5G transitions to SA 5G (Standalone) network architecture, its advantages over 4G LTE become more apparent and its applications expand. At the same time FWA applications will also transition to 5G, adding to the benefits of FWA, and as can be seen in Figure 2, FWA as a percentage of total data traffic, grows. We note that while the growth of Mobile data traffic for the combined 2G, 3G, 4G, and 5G modalities is declining, much of that comes from the elimination of 2G and 3G technology and the adoption of 5G on a global basis, given the much higher data rates that 5G is capable of. That becomes evident when looking at carrier data in the US, where T-Mobile (TMUS) saw its user base for its FWA service reach over 1.5m users in 2Q this year[2], for a ~72% CAGR, while AT&T (T) saw 4.7% growth and Comcast (CMCSA) saw only 0.6% during the same period, both of whom offer fiber or cable only service.
There are issues that can hinder the use of 5G for FWA, particularly the necessity for higher tower density for 5G, which is certainly an issue for carriers, and this has even limited T-Mobile’s seemingly rapid growth of its FWA services. Growing the availability of 5G FWA, meaning carefully mapping tower building against potential customers, and limiting new FWA customers to match available local bandwidth, is necessary so as not to reduce the benefits of 5G’s low latency and high speed transport. Therefore, we expect FWA, especially the 5G component of FWA, to grow at a more measured rate, but given the benefits of 5G technology, and its ability to reach customers where cable or fiber is not economically feasible, we expect FWA to continue to grow both in its user base and in the percentage and net amount of data traffic it can move. Local and global economics will certainly have an effect on FWA growth, but in the long-run we believe the benefits of 5G FWA will allow it to continue to gain an increasing user base, especially in areas where only one hard-wired carrier is offered.
[1] 2019 – 2028 – Source: Ericsson Report 2022
[2] The service was initiated in early 2021.
FWA, in most cases, is based on 3G or 4G technology, with relatively new 5G services piggybacked on existing infrastructure (NSA 5G), but as 5G transitions to SA 5G (Standalone) network architecture, its advantages over 4G LTE become more apparent and its applications expand. At the same time FWA applications will also transition to 5G, adding to the benefits of FWA, and as can be seen in Figure 2, FWA as a percentage of total data traffic, grows. We note that while the growth of Mobile data traffic for the combined 2G, 3G, 4G, and 5G modalities is declining, much of that comes from the elimination of 2G and 3G technology and the adoption of 5G on a global basis, given the much higher data rates that 5G is capable of. That becomes evident when looking at carrier data in the US, where T-Mobile (TMUS) saw its user base for its FWA service reach over 1.5m users in 2Q this year[2], for a ~72% CAGR, while AT&T (T) saw 4.7% growth and Comcast (CMCSA) saw only 0.6% during the same period, both of whom offer fiber or cable only service.
There are issues that can hinder the use of 5G for FWA, particularly the necessity for higher tower density for 5G, which is certainly an issue for carriers, and this has even limited T-Mobile’s seemingly rapid growth of its FWA services. Growing the availability of 5G FWA, meaning carefully mapping tower building against potential customers, and limiting new FWA customers to match available local bandwidth, is necessary so as not to reduce the benefits of 5G’s low latency and high speed transport. Therefore, we expect FWA, especially the 5G component of FWA, to grow at a more measured rate, but given the benefits of 5G technology, and its ability to reach customers where cable or fiber is not economically feasible, we expect FWA to continue to grow both in its user base and in the percentage and net amount of data traffic it can move. Local and global economics will certainly have an effect on FWA growth, but in the long-run we believe the benefits of 5G FWA will allow it to continue to gain an increasing user base, especially in areas where only one hard-wired carrier is offered.
[1] 2019 – 2028 – Source: Ericsson Report 2022
[2] The service was initiated in early 2021.
Mobile Data Traffic - Source: SCMR LLC, Ericsson Mobility Report 2022
Mobile Data Traffic vs. FWA Data Traffic - Source: SCMR LLC, Ericsson Mobility Report 2022
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