Fixed wireless has been the salient example of new revenue generated by 5G because of a new use case. For T-Mobile in the U.S. market, the upside is quite tangible. T-Mobile has been touting a customer base of between seven million and eight million accounts by 2025, and Neville Ray, T-Mobile President of Technology, says he is “very comfortable with that projection, with 2.6 million in as of last quarterly results reported.”
It might not be immediately obvious, but with a universe of perhaps 110.5 million locations (small business and home), eight million accounts represents about seven percent market share of the installed base of subscribers.
And considering that T-Mobile has had zero percent share of that market, a seven-percent share of the installed base acquired over a four-year period would be noteworthy indeed.
Competitors say growth eventually will be capped. In existing markets, spare capacity will be soaked up, limiting the number of new accounts that can be added, for example. Right now, the strategy is to offer fixed wireless in markets where there is plenty of available spectrum.
Critics say that surplus eventually will be absorbed. But T-Mobile believes it can continue to add spectrum resources to keep pace.
“We talked in all of those DOJ, FCC pleadings and presenting our case about how over a five-year period, we could create a 14 times, 1-4, 14 times multiplier on the capacity of the T-Mobile network with the spectrum assets and all the capabilities that we would bring,” said Ray.
Even refarming unused 4G spectrum will bring more efficiency gains when used to support 5G, Ray says. “Mid-band 5G compared to legacy mid-band LTE, that's a two times to three times multiple on efficiency.”
That noted, fixed wireless is not generally believed to be a direct competitor to fiber-to-the-home or advanced hybrid fiber coax capacities. But T-Mobile always notes that a significant percentage of the buyers are content to buy services operating at less than 200 Mbps.
Over time, as “typical” speeds climb, it might be the case that 1 Gbps is the minimum capacity required for a competitive offering. But that might come in a decade or more, Ray argued. And spectrum assets including millimeter wave will have a role to play in supporting gigabit speeds on fixed wireless networks.
Some believe rural fiber access could eventually reach 70 percent market share in the home broadband market. But that still leaves a 30-percent share potential for other platforms best suited to low-density areas. In other words, fixed wireless access might be as “temporary” a solution as some critics believe.
Even at eight percent adoption in 2025, fixed wireless could generate between $14 billion and $24 billion in new revenue for ISPs using the platform. In a market where $1 billion worth of new revenue is a big deal, that is a really big deal.
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