U.S. FWA Market Primes for Accelerated Growth Due to 5G

Internet coverage in rural areas of the United States has predominantly been provided by telecommunication companies utilizing either Digital Subscriber Line (DSL) or Satellite. Companies utilizing DSL solutions include CenturyLink and AT&T, and companies utilizing satellite solutions include Hughes.net and Viasat Internet. These companies provide coverage over most of the states in United States. DSL is available throughout the country and has relied on copper telephone lines to support the underlying internet infrastructure.

The North American continent is subject to severe weather conditions and natural disasters (e.g., hurricanes, tornadoes, snowstorms, floods, etc.) that can devastate phone lines. Natural Disasters in the United States cost an estimated US$81.9 billion dollars in 2018. When businesses rely mainly on DSL and satellite, there are issues with connectivity when heavy thunderstorms or hurricanes occur. Small and Medium-sized Businesses (SMBs) are likely to be subjected to productivity losses during an internet outage as alternatives are limited for them as compared to large corporations. That reality is starting to change as alternative solutions such as mobile broadband and fixed wireless internet can provide telecom redundancy and additional data connectivity to ensure business continuity and resilience.

Mobile Broadband, a potential solution for SMBs, has the advantage of mobility and portability. However, there are data quota limitations that can make it ill-suited to the needs of businesses. The other alternative solution is Fixed Wireless Access (FWA), used by Wireless Internet Service Providers (WISPs), which provides last-mile internet service through point-to-point devices from the nearest access point. With its reduced capital investment and deployment costs, FWA provides advantages over traditional wired solutions for businesses. FWA solutions based on LTE or LTE-Advance might not be able to reach the speed of wired solutions, such as fiber-optic, but the lower cost to businesses while attainting a satisfactory speed provides an edge for FWA.

There are a number of disruptors striving to take on the WISP and telco incumbents. Ooma, Inc., which commenced operations in 2003, has launched a new product, the Ooma Connect, which provides both internet service and phone service.

Ooma Connect, a Customer-Premises Equipment (CPE), comprises an Ooma Connect Base Station and a CAT 12 High Powered User Equipment (HPUE) LTE module connected through an ethernet cable to the Ooma LTE 460 Adapter. The solution intends to provide businesses an affordable and reliable option compared to DSL, cable, or satellite connections. Ooma has highlighted the opportunity cost, equivalent to US$40 billion, to small businesses from internet outages and the lack of alternative connectivity solutions to ensure continuity. The company also highlighted that at least 22% of its small business core users are utilizing DSL but it is insufficient for their needs. Ooma had 156,000 business core users at the end of 2019.

Ooma Connect offers clients a combined wired and wireless solution. In the case of an internet outage, internet connection and phone service then defaults to the wireless connection. The company keeps the wireless services up through its nation-wide LTE-advanced network provided by Sprint, which has recently merged with T-Mobile. Ooma intends to keep the solution simple to support mobility and scalability. Ooma Connect ensures business continuity through its LTE-advanced network connected via the Ooma LTE 460 Adapter. While the adapter currently utilizes LTE-Advance, it is also equipped with 2 x 8 Multiple Input, Multiple Output (MIMO) antennas, which can support data speed up to 600 Mbps. The CPE has also been designed to support future 5G wireless adapters.

The current COVID-19 situation has also highlighted the importance of connectivity and solutions that can be deployed easily and quickly. This is to ensure businesses can continue to function and critical information can be transmitted.

In the arena of providing internet services for SMBs, there are many different solutions. While connections via wired or satellite are provided throughout the nation, there are market opportunities to enhance the performance of the connection. The opportunity identified by Ooma, Inc. in the SMB market has resulted in the company releasing Ooma Connect. Through an FWA solution, Ooma Connect, and a network partner, Ooma is providing a cost-effective solution. ABI Research’s 5G Devices for Fixed Wireless Broadband (AN-5257) Application Analysis Report has forecasted the worldwide fixed wireless broadband market will generate US$50 billion in service revenues by 2024. In a fragmented fixed wireless broadband market in the United States, the opening of the 3.5 GHz Citizens Broadband Radio Service (CBRS) band and the advantages of using FWA solutions to provide fast and reliable connectivity will likely stimulate more competition and continue to fuel FWA CPE market development. 

The authorization of CBRS at the start of 2020 created additional spectrum that wireless internet service providers can harness. This creates the opportunities for more FWA CPEs that cater to the spectrum to be manufactured and supplied. LTE and proprietary FWA are likely to continue as the go-to solution for rural areas and developing countries till 5G coverage is extensive. In a similar report by ABI Research, more than 90% of the FWA CPEs shipped in 2019 supported LTE. Nonetheless, there are work in progress for 5G FWA CPEs. Prominent players, such as Huawei and Nokia, have been pushing ahead with their 5G FWA CPE solutions. Huawei, a company that seeks to realize its “Broadband for All” vision, has launched two 5G CPEs, namely the Huawei 5G CPE Pro and more recently the Pro 2. Nokia has also launched its FastMile 5G Gateway. Competition in the FWA market, in both the WISP domain and the vendor domain, is only likely to intensify.