5G Fixed Wireless Will be a Huge Deal

Fixed wireless is going to be a big contributor to "new revenues" generated by 5G networks, for several reasons. First, 5G fixed wireless is going to change the economics of "fixed network" gigabit access. In other words, 5G-based fixed wireless is going to make "gigabit to the home" feasible when fiber to the home is not feasible.

To the extent that "new or incremental revenue" is key for the 5G business model, that will matter, as that use case is going to have revenue scale. Few other truly new apps are going to have such scale, in the early going.

Basically, 5G will have opportunities where 4G bandwidth is insufficient, or where 4G bandwidth is not needed (low data rate, low data volume IoT).

Consumer gigabit internet access is one application 4G generally cannot support.

At least some observers might have argued that “we do not need 3G.” Some might have argued there “is no need for 4G.” So it is not surprising that some argue there is no need for 5G, either.

One argument might be that mobile data growth actually is not as robust as many believe it is. Whether one agrees with that assertion or not, fixed network internet access substitution is unaffected by such arguments. If 5G fixed wireless can supply the residential gigabit internet access market at lower costs than fiber to the home, it will happen.

When it is argued that mobile “users will not value the higher data rates that are promised and will not need the higher capacity forecast,” as William Webb, Ofcom senior technologist, has argued, that is not true of 5G fixed wireless used as a substitute for fixed network internet access connections.

In fact, 5G should enable new business models precisely because it eliminates the price and performance advantage fixed networks traditionally have held over mobile networks, making mobile a full network substitute for the first time, and essentially allowing mobile to cannibalize fixed network revenues.

Networks that can deliver the highest speeds and greatest reliability will command the highest average revenue per connection, Juniper Research argues. That means 5G actually will be strategic for mobile operators.

That is one reason some believe 5G fixed wireless will be so significant. A single consumer 5G fixed wireless connection, in the U.S. market, for example, should generate monthly revenue between $50 to $100, depending on bandwidth, about the range of similar fixed network connections.

That is a big deal, when many internet of things connections might generate only a few dollars a month of revenue.

Also, consumer demand for internet access--including higher-bandwidth versions--is well known, and large. That means it has potential to directly and powerfully affect total service provider revenues. Many other new IoT apps will generate comparatively small revenues, at first, and so not move the revenue needle appreciably.

Fixed wireless could have a significant impact.