Fixed Wireless Market Trends
Despite recent global economic turbulence, the fixed wireless access (FWA) industry is still very much a growth market.
According to a recent report by Wells Fargo, FWA broadband is on track to add more than 10 million subscribers by 2027. Increased federal funding for programs aimed at rural and underserved markets will help drive this growth.
That funding is likely to continue to flow this year and beyond, with the most recent example being the announcement of $41B for the Broadband Equity, Access and Deployment (BEAD) program. This program excludes ISPs providing fixed wireless over unlicensed spectrum, however—a controversial oversight, to say the least. More on that below.
A continued investment in fiber or hybrid networks by local and regional ISPs is another trend we’re tracking, along with a move toward more sophisticated data-driven network management and marketing.
With all this in mind, let’s have a closer look at some of these emerging market trends in the fixed wireless world. We’ll also hear from some of our in-house experts on what to watch out for this year and beyond.
Fixed Wireless Market Growth
The pandemic showed us internet access is an essential service, as millions relied on it for remote work and school. A study from Tufts University even linked broadband access to lower COVID-19 death rates.
While most students have returned to classrooms, remote work is here to stay as a flexible, work-anywhere philosophy is embraced. This makes the need for internet service in underserved areas even more urgent. It also gives fixed wireless ISPs opportunities to grow.
For example, remote workers may choose to move out of cities and heavily-populated areas to access cheaper housing and a less hectic lifestyle. This will only increase demand for fixed wireless broadband.
The surge in internet use during the pandemic and an increase in the number of connected devices has analysts predicting a robust Compound Annual Growth Rate (CAGR) of almost 75% for the global FWA market until 2026.
Growth is also being driven by the continuing need to expand internet access across the US. For example, an estimated 30% of households in remote and rural communities still do not have access to high-speed broadband.
As wireless research expert Jeff Moore stated in a post-WISPAMERICA 2022 article for Fierce Wireless, WISPs now serve 6.7 million subscribers “and could grow to 12.7 million in 2025.” Citing a Carmel Group report, Moore also said that “revenues per subscriber have been rising while subscriber acquisition costs have been falling. There are now more than 2,800 WISPs, with many of them also serving homes via fiber.”
We should also remember that FWA market growth has a positive effect on the economy as a whole. Simply having access to broadband, for example, has been shown to drive entrepreneurship and significant economic growth. This is why local and regional ISPs and the services they provide continue to be essential.
What Our Experts Are Saying
LEO Won’t be King of the Jungle
It’s an Internet technology jungle out there. DSL, cable, fiber, fixed wireless, GEO and LEO. New low-earth orbit (LEO) satellite constellations (think Starlink) are an exciting option in many parts of the world that were previously unserved. With any access layer technology used to directly connect Internet users, there are engineering tradeoffs. LEO has the potential to give every square inch of the earth’s visible surface Internet coverage. (Almost every part, that is, not covered by trees, jungle, or other obstacles.)
This infinite coverage comes at a cost—finite capacity. Total bandwidth will grow over time as more satellites are launched, but in populated areas, Starlink is already “full.” In low population density areas where even FWA isn’t cost-effective, LEO is a game changer and fantastic technology. In more populated areas, other tech will be more effective. Don’t panic about LEO taking the lion’s share. – Jeremy Austin, Senior Product Manager, Preseem
Government Funding for Broadband
Since the beginning of the pandemic, government funding for broadband has been on the rise. In fact, the US Government Accountability Office (GAO) recently identified over 100 federal broadband programs and suggested better coordination was needed.
A summary of major US funding programs can be found here, and includes:
- Broadband ReConnect Program: Established pre-pandemic to serve areas with limited access to broadband, this program doled out almost $2B in 2020-21
- Rural Digital Opportunity Fund (RDOF): Launched in 2020, RDOF is ongoing and will eventually distribute $20B to successful bidders to connect homes and businesses in underserved areas
- Consolidated Appropriations Act 2021: Announced late in 2020, this legislation committed more than $5B to broadband initiatives. These included the $3.2B Emergency Broadband Benefit (EBB) program, the Broadband Infrastructure Program, and the Connecting Minorities Community Pilot
- American Rescue Plan Act of 2021: Included the Capital Projects Fund that prioritized fiber funding and the FCC’s Emergency Connectivity Fund for libraries and schools to purchase broadband devices
- Infrastructure Investment and Jobs Act: Includes additional funding for the Affordable Connectivity Program (formerly EBB) and over $42B for the Broadband Equity, Access and Deployment (BEAD) program
The BEAD Program was announced by the National Telecommunications and Information Administration (NTIA) in mid-May. The notice of funding opportunity (NOFO) included a controversial definition of Reliable Broadband Service that excluded “services using entirely unlicensed spectrum.” This definition essentially makes WISPs ineligible for billions in BEAD funds.
In response, we issued a statement in support of our WISP friends. The Wireless Internet Service Providers Association (WISPA), meanwhile, asked the US Congress to take a look at the wording of the funding opportunity. Keep an eye on this story and the continued flow of government dollars aimed at bridging the digital divide as the year progresses.
The Rise of Fiber and Fixed Wireless Hybrid Networks
Hybrid networks combine the use of fixed wireless and fiber technology, and are becoming an increasingly attractive investment for local and regional ISPs.
In 2020, we hosted a webinar on hybrid networks as part of our WISP Virtual Summit. During the webinar, network experts from E-vergent (Wisconsin), PocketiNet (Washington), and Finley Engineering (Minnesota) discussed the changing nature of the fixed wireless industry and the role of hybrid ISPs in its future.
Fred Facemire, Director of Engineering at PocketiNet, explained that they take a hybrid approach to fiber and fixed wireless depending on the neighborhood they’re targeting. He said that fiber can be a time-consuming and expensive “adventure” that can easily rise to hundreds of thousands of dollars to purchase and maintain equipment.
In new neighborhood developments where it’s easy and less expensive to lay fiber, then that can make sense. In established neighborhoods that lack existing fiber infrastructure, however, fixed wireless is a more cost-effective option. Also, it makes more sense to go with fixed wireless in neighborhoods that are more rural or where houses are located further apart.
Chris Konechne, Project Manager at Finley Engineering, said that some advantages to fiber include nearly-unlimited bandwidth and backhaul capacity, along with the recent flow of funding dollars mentioned above. He said it’s also a long-term asset with relatively low ongoing operational costs, and can help meet the steadily increasing bandwidth demand from consumers.
Disadvantages, however, include the cost (around $10K to $50K per mile in Minnesota) as well as the headaches and relative unreliability of aerial fiber. He noted that a recent feasibility study they conducted found that the cost to install a fixed wireless-fiber hybrid was around a quarter of the cost to install full fiber to the home (FFTH).
Additional Perspective from Sonar Software
Earlier this year, our friends at Sonar Software also took a look at the advantages of hybrid networks and noted some key points for fixed wireless providers to consider when thinking about going hybrid. Some of these include:
- Cost: Fiber is a more costly option than setting up and running a traditional fixed wireless network, which may make it prohibitive for smaller providers. For larger ISPs, however, the benefits of reaching a wider audience with a more flexible network may make the investment worthwhile. Also, with funding dollars for fiber flowing freely from DC, now could be the time to take the plunge.
- Scalability: As noted in Sonar’s blog, scaling a fixed wireless network is not always easy because the “spectrum in an area may not provide the available bandwidth needed to support a growing customer base.” Adding fiber to the mix can help remove this concern and provide ISPs with another tool they can use to expand their network and grow their business.
- Reliability: Here at Preseem, we’re firm proponents of the reliability of fixed wireless, as noted in our recent BEAD Program statement linked to above. The reason for wireless ISPs to consider adding fiber, however, may be to address public perception around reliability. That is, most people won’t know the difference between fixed wireless and fiber, only that they’ve “heard” that fiber is more reliable. If you’re able to offer a hybrid approach, this could help overcome a key objection in the sales process.
To be sure, a hybrid approach has its advantages but it’s best for ISPs to fully understand the costs, regulatory implications, and technical issues in advance before going that route.
Another trend we’re noticing among local and regional ISPs is the increasing move toward taking a data-driven approach to network operations.
We’ve seen a couple of recent examples of this with our customers, especially when it comes to using data to determine how much subscriber capacity is available on their APs.
Adding AP Capacity – Vistabeam
As Matt Larsen, CEO of Vistabeam put it during a webinar we co-hosted during WISPAMERICA 2022, “I’m not a big believer in the internet of feelings.” However, this was essentially how they were forced to determine subscriber capacity in the past, i.e. using gut feelings and whether or not subscribers were complaining about poor internet on a given AP.
This often led to conflict between management, sales, and networking staff. After switching to Preseem Plus, however, our Available Subscriber Capacity score was able to show them at a glance the true state of each AP.
“We now have empirical data that replaces feelings,” said Matt. “There is one place to point to that is an authority on whether we can sell more capacity on this access point or not.” As a result, he estimates they’ll be able to add 30% more capacity on their network.
Saving 10-15 Hours per Week – ZIRKEL
Similarly, we hosted a webinar with ZIRKEL Wireless, a WISP in Colorado that was also having problems determining capacity on their APs. Again, this issue was resolved with the capacity score.
“We found that our network had the capacity to add somewhere close to 1,900 subscribers without our entire system being overloaded,” said Joshua Nowak, Director of Operations at ZIRKEL.
“We knew that some access points on the network had capacity to go sell additional bandwidth and we knew that some access points on the network were overloaded. But we were spending 10, 15-plus hours every week combing through a variety of systems to try and identify this. And with these new features from Preseem, it’s a click of a button.”
Joshua said this also allows them to use targeted marketing in neighborhoods where they can now tell they have capacity to sell. Clearly, these are Preseem-centric examples, but we include them here as real-world evidence of the power data can have in helping your ISP become more efficient, save time, and add more revenue.
So that’s our look at some of the fixed wireless market trends we’re seeing for 2022 and beyond. It’s an exciting era of growth and opportunity fueled by the move to remote work, an increasing number of devices in the home, and government funding aimed at closing the digital divide.
With major players entering the fixed wireless and fiber market, there’s increased competition for local and regional ISPs to deal with. However, a focus on data-driven network management and improving the customer experience can give WISPs an advantage over the big corporations.