Use of fixed wireless to provide home broadband services traditionally the preserve of cable operators and fixed network telcos is a big opportunity for T-Mobile, primarily because it does not presently compete in that space.
It might also be a significant opportunity for Verizon and AT&T as well, for different reasons, and a possible threat to U.S. cable operators who dominate the home broadband business.
“We're serious about home broadband. It's going to be an important way that we grow this business and make money,” says Mike Sievert, T-Mobile CEO. Home broadband “is going to be where a big piece of the profit pool is.” And that “profit pool” Sievert talks about is financial returns from 5G.
Aside from faster mobile broadband and enterprise use cases, 5G will create a new space for fixed wireless services delivering home broadband services as a substitute for fixed network access, and most likely far sooner than new enterprise use cases reach scale.
As a practical business matter, it is far easier to take market share in a big existing market than to create new demand for new use cases and services. Customers understand the simple value propositions “same product, lower price” and “better product, lower price.”
That noted, T-Mobile is likely to find success in a particular part of the fixed network home broadband business: customers with modest speed requirements. That is the result of both supply and demand.
Most likely, the center of gravity of demand for 5G fixed wireless is households In the U.S. market who will not buy speeds above 300 Mbps, or pay much more than $50 a month, at least in the early going. The reason is that that pricing level and downstream bandwidth fits the profile of 5G fixed wireless using mid-band spectrum.
Verizon fixed wireless offers also suggest that same 5G “sweet spot” in the market. In the meantime, there is 4G fixed wireless, which will have to be aimed at a lower-speed portion of the market, albeit at about the same price points as 5G fixed wireless.
Up to this point, Verizon 4G fixed wireless, available in some rural areas, offers speeds between 25 Mbps and 50 Mbps. That might appeal to consumers unable to buy a comparable fixed network service.
Later iterations using millimeter wave service will sometimes be a more-serious competitor to cable operator services operating up to a gigabit per second.
Fixed wireless might be even more important elsewhere in global markets.
And fixed wireless in pre-5G times already was a significant revenue driver globally. By some measures, the global market for all business voice and unified communications, including the value of business access to support voice and UC, is perhaps US $28 billion a year.
Of that $28 billion or so of revenue, perhaps $10 billion consists of internet and data access circuits, implying that the value of hosted voice, unified communications apps and phone systems is about $18 billion annually.
So compare that to just one other product, namely fixed wireless internet access, admittedly a niche.
The global fixed wireless access market generated $18 billion in service revenue in 2018, according to ABI Research.
The point is that the fixed wireless revenue segment already is about the same size revenue contributor as business voice and unified communications.
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