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Analyst Opinion: The window is still open for fixed wireless technologies

Fri 22 Apr 2016
FYI, this story is more than a year old

Article by Mark Newman, Ovum analyst

“Fixed wireless” is one of those terms in telecommunications that hasn’t aged particularly well. It tends to be associated with obsolete or proprietary solutions that failed to win the support of the large network equipment providers focused on driving standardisation and scale in global cellular (mobile) technology. But there is now renewed interest in fixed wireless. This is mainly the result of the following factors:

  • WiMAX operators across the world are upgrading their networks to TD-LTE.
  • Enhancements to LTE technology are giving mobile operators the opportunity to start providing home broadband services.
  • Looking ahead to 5G, the speeds being offered and the characteristics of the technology and the spectrum in which it will operate mean that it will be suited to indoor applications.
  • There is a focus across the world on connecting the unconnected – in the rural areas of developed markets and throughout the developing world, where fixed broadband connectivity into homes and offices is limited.

Fixed broadband technology tends to fall into two categories: proprietary solutions that are specifically designed to connect fixed locations (i.e. buildings) and standardised cellular technologies that are adopted (and in some cases adapted) to serve a home or an office. WiMAX was a technology designed to be mobile but which became a fixed wireless solution.

The biggest WiMAX operator was Clearwire, which at its peak in January 2012 had 11 million customers. But a year ago Sprint – which acquired Clearwire in 2013 – wrote to its customers to inform them of its intention to shut down its WiMAX network. The network eventually closed and customers were switched to LTE at the end of 2015.

As with many new wireless technologies, WiMAX never delivered the speeds that many of its backers had promised. Independent tests indicated that most households were receiving data speeds in the 1–3Mbps range. Ultimately it was the emergence of LTE as the global mobile standard backed by all the leading vendors – and a migration path that promised ever-improving speeds and a competitive market for technology – that resulted in the demise of Clearwire’s WiMAX network. But WiMAX has enjoyed a longer life in many emerging markets, where it has little or no competition from fixed broadband (or from LTE). Ovum’s World Broadband Information Service tracks 75 countries where operators offer home broadband services based on WiMAX. However, only 5.4 million people were connected to these networks at the end of 2015 and most are migrating to TD-LTE technology.

While fixed wireless broadband operators are seeking to deploy LTE – a technology that is connecting more than 1 billion mobile customers globally – existing mobile operators have the potential to expand into the fixed broadband market with new LTE-based solutions from technology vendors. At Mobile World Congress this year Huawei showcased a solution that it calls “WTTx” which uses multiple antenna (MIMO) technology and carrier aggregation to deliver home broadband services. According to Huawei, the 4.5G technology is capable of delivering speeds up to 1Gbps.

Technologies such as WTTX offer mobile operators the opportunity to expand into the home and SME broadband market without building out fixed-line networks. Huawei believes that its solution is a cheaper alternative to local loop unbundling and DSL rollout (an approach that is being adopted by many mobile-only operators across the world to compete in multiplay).

But it is in emerging markets that wireless broadband has the most obvious potential. For example, an estimated 61% of households in Asia-Pacific still do not have Internet access according to the ITU. In most emerging markets wireless is the only viable means of delivering home broadband services and it presents an interesting new opportunity for mobile operators whose growth has slowed dramatically in recent years.

Google and Facebook are also developing new technologies to serve the unconnected. Until now their focus had been on backhaul – developing technologies using balloons, pilotless planes, or satellites. But earlier this month Facebook announced new wireless technology initiatives focused on the wireless access market. Project Aries is a system that combines MIMO and point-to-point deployments to extend broadband connectivity from city centres out into rural areas. Ultimately Facebook would like to partner with mobile operators and for them to deploy the technology that it has developed.

Whenever a new generation of mobile technology arrives there is excitement about its potential for delivering an alternative to fixed broadband. It’s the same for 5G, and US company Starry has already announced plans to deploy a home broadband service using 5G later this year. History suggests that such approaches and business models will have limited success. But with the speeds promised on 5G – and the fact that fibre connectivity (and backhaul) is getting closer and closer to homes and buildings – it would be foolish to jump too early to conclusions.

Article by Mark Newman, Ovum analyst

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