Faced with fierce competition to provide consumers with high speed broadband at home, why are US telco operators turning to fixed wireless for their solution? We delve into the drivers and implications of providing home gigabit broadband with fixed wireless technology.

Fixed Wireless Gets Momentum to Expand the Home Gigabit Broadband

By Tomislav Marcinko

Recent technological advancement and 5G standardization are powering fixed wireless technology to serve our homes with gigabit speeds. Amidst stiff competition for the home broadband market, some US telco operators are embracing fixed wireless to pursue the gigabit opportunity and avoid falling behind. Here we discuss some of the drivers for such transformation and implications for its larger scaling up.

Resurgence in fixed wireless demand

Fixed wireless technology has been used for years to provide broadband to low population areas where wireline providers haven’t built next generation fixed networks. The technology is proven, and offers typical speeds of up to 25Mbps. In the US, operators such as Rise Broadband and Red Zone have been using this technology to enable more flexible and affordable broadband access in rural areas.

More recently, new entrants like Webpass and Starry have been implementing near-gigabit speeds using fixed wireless to compete with incumbents, taking advantage of next-generation wireless technology and new available spectrum. Service providers that in the past focused on fiber-to-the-home (FTTH) technology to pursue the home gigabit broadband are now considering fixed wireless as a more cost-effective technology to connect subscribers.

More spectrum enables ‘fiber-like’ speeds

In response to growing demand, the FCC authorized more spectrum for mobile services and fixed wireless applications. Broadband providers can now access larger than 10 or 20MHz channels in these newly regulated sections of the spectrum to achieve the gigabit speeds that were previously offered only by fiber or cable providers:

  • Millimeter wave: In high-frequency spectrum above 24GHz, the FCC established channels of 100-200MHz, 425MHz and 1,400MHz in the 24, 28 and 39GHz bands respectively. In addition, the FCC freed 14,000MHz of unlicensed spectrum between the 57 and 71GHz bands[i]. Verizon and AT&T obtained large spectrum allocations in these bands through the acquisition of license holders.
  • The mid-band: The FCC also aims to implement a sharing spectrum framework in the 3.5GHz band (also known as Citizen Broad Radio Service “CBRS”), allowing service providers to access up to 150MHz of spectrum. Although final rulemaking on license’s geographical areas and duration is still pending, wireless internet service providers (WISPs) expect to improve their product speeds with such spectrum.[ii]

New radio access technology makes gigabit fixed wireless a reality in dense areas

The use of higher frequencies is not without its challenges. Higher frequency radio signals suffer greater signal attenuation, more sensitivity to weather conditions and lower performance in the presence of obstacles that block the line of sight. In urban scenarios, these factors play a key role in the radio network and capacity planning. However, these recent improvements in antenna capabilities and radio equipment are compensating for such factors:

  • Beamforming: Directing signals to specific areas using an array of non-directional antennas helps compensate non-line of sight in the radio propagation path due to buildings or foliage.
  • Massive MIMO: Increasing the number of simultaneous transmitters and receivers in antennas from existing 4x4 configuration to 16x16, or even 64x64, helps increase data throughput and broadband speeds.
  • Higher modulation and improved channel access: Higher-order modulation and OFDMA sub-carrier access schemes improve spectral efficiency, enabling more data to be transferred in same spectrum, increasing the capacity of the system.

As result of such technology improvement, equipment vendors and service providers have trialed successfully next-gen fixed wireless and achieved gigabit speeds using high frequency spectrum in multi-dwelling units and high-rise buildings in dense urban areas.[iii]

Fixed wireless networks are more flexible to deploy

Fixed wireless providers have implemented hybrid networks, taking advantage of existing resources to serve homes much faster.

With a combination of point-to-point and point-to-multipoint topologies, fixed wireless providers can install base stations on the rooftop of buildings, and then relay signals to adjacent apartments and housing units. For backhaul, using a mix of high-throughput microwave and existing dark fiber also reduces deployment time. As result, fixed wireless operators can more rapidly roll-out fixed wireless access and extend serviceable areas.

Fixed wireless shows attractive economics compared to fiber in certain markets

  • Fiber deployment remains expensive. Typical “cost-to-pass” and “cost-to-connect” using fiber in urban areas ranges $800-$1,500, depending on the number of homes per square mile. The cost can rise to $2,000 in suburban areas, making the business case unviable in markets with low household density. Deploying fiber is expensive due to the intensive civil and labor works as we showed in a previous analysis. Therefore, broadband providers are looking for cheaper alternatives. For example, Google Fiber discarded fiber and adopted a fixed wireless with the acquisition of Webpass in mid-2016[iv].
  • Fixed wireless exhibits lower costs to serve subscribers. Estimates from Starry indicate that the cost to pass a home can be $25 in areas with 1,500 households per square mile.[v] Incorporating the costs of customer premise equipment (an outdoor or indoor antenna plus router) estimated at $200[vi], the total cost per home – including installation – can reach nearly $250, which is between 20% and 30% the cost to pass and connect a home with FTTH technology.
  • Market selection is essential to benefit from this technology. New entrant fixed wireless operators are targeting city neighborhoods with high numbers of MDUs as these have favorable economics. Launch prices are often 20 -25% below comparable fixed broadband plans. For example, Starry offers 200Mbps package at $50/month in Boston and DC[vii] and Webpass advertises near-gigabit speeds for $60/month in San Francisco.[viii] Incumbents are also turning to fixed wireless — Verizon plans to use it to target nearly 30 million households outside of its FiOS fiber footprint to expand its gigabit opportunity.[ix]

Fixed wireless is a promising solution but needs market validation to scale up

While there are many reasons to be positive about next-gen fixed wireless, it still needs to prove commercial success at scale.

Risks to the business case include the ability to compete with fiber, maintaining low build costs, and avoiding unnecessary truck rolls for customer installation. Performance of the new wireless technologies need to be tested with real customers’ usage as quality of experience on a loaded network will ultimately be more important than headline advertised speeds. Recent commercial launches will provide real-life information to thoroughly validate the business case and prove the viability of the gigabit fixed wireless in the home broadband market.


Sources:

[i] "Use of Spectrum Bands Above 24GHz for Mobile Radio Services", [PDF] FCC Fact Sheet October 2017 

[ii]"CTIA Wants FCC to Make July 'Mid-Band Month'", John Eggerton, Multichannel News, May 2018  

[iii] "Verizon Says Fixed 5G Trials are Performing Better than Expected", Sue Marek, SDxCentral, October 2017 

[iv] "Why the Acquisition of WebPass could be significant for Google Fiber", Forbes, June 2016 

[v] "Startup Says Beeming Millimeter Waves Over the Air Will Make It a Star in Ultra-Fast Wireless Broadband", Amy Nordrum, IEEE Spectrum, December 2016  

[vi] "Low Costs, Dense Markets Critical to Starry's Success: Analyst", Jeff Baumgartner, Multichannel News, April 2017 

[vii] https://starry.com/internet [June 2018]

[viii] https://webpass.net/san_francisco [June 2018]

[ix] "CFO: Verizon 5G Plans Will Target 30M Homes Outside of Fios Markets with Fixed Gigabit Wireless", Joan Engebretson, Telecompetitor, December 2017