ATLANTA — Regional wireless carriers can’t match the scale and resources of the big three, but they can line up with their larger rivals on one point: 5G can’t just be about phones.
That emerged in a Fierce Wireless panel I moderated today at the Competitive Carriers Association’s convention. Executives from U.S. Cellular, Carolina West Wireless and Appalachian Wireless (plus one from Ericsson, which sponsored the panel) emphasized how such 5G offshoots as fixed wireless access in homes and private network service to businesses were logical next steps — even if these carriers had to learn a few new steps of their own first.
That’s because smaller carriers are bumping into the same profit-margin limits on smartphone plans that AT&T, T-Mobile and Verizon have faced, and reshuffling those plans the way the big three have done can only accomplish so much.
”It is fiercely competitive,” said Adriana Rios Welton, US Cellular’s general counsel and chief of government affairs. She pointed to the rise of discount-priced cable MNVOs in particular as “bringing a dynamic that is really, really tough to navigate” and “requires us to be really smart about other areas of our business,” starting with fixed wireless.
“We don’t really have that killer app that anybody is looking at saying, yes I want to pay an extra $10, $15,” said Carolina West Wireless CEO Slayton Stewart. And while that Wilkesboro, N.C., firm works to find ways to upsell carriers on higher-value plans, that has its own limits: “There is that price elasticity where customers just stop paying more.”
Panelist Surya Bommakanti, head of cloud software and services at Ericsson North America, called FWA “the second horizon in the development of this market.” She said it has brighter prospects in comparison but comes with other challenges.
“Almost 4% of our customer base now are fixed wireless access customers,” Stewart said. “We’ve seen a lot of adoption in the most rural areas; I’m not seeing as much success with take rates in some of our larger cities.”
Carolina West has also “learned some pretty hard lessons” about FWA capacity, he said. It’s had to hurry CBRS into service after seeing FWA start to overload its mobile network, then put more resources into verifying that it can provide good service at any one residence. “So there’s a lot of growing pains there,” he said.
“I think we’ve also learned some painful lessons with respect to rolling it out,” said Welton, noting that US Cellular’s original plans to deploy FWA with outdoor antennas to maximize its towers’ reach ran into installation issues. “So we pivoted to an indoor antenna, which has to be a little bit closer to the tower.”
Bommakanti warned that FWA services can’t deliver a product that requires at-home fiddling: “The number of people that have returned something immediately, because they couldn’t actually get it to provide them an adequate signal is pretty staggering.”
Appalachian Wireless is also eyeing FWA as a new business line when it deploys 5G, which it will launch with a standalone core. But its hilly terrain complicates its work: “We need more towers than most regional carriers,” said Darlene Howell, director of customer relations.
She put in a plea for expedited environmental approval and permitting, saying the current process takes far too long: “At minimum, it’s 14 to 16 months per site.”
Progressing to selling private 5G connectivity and such other higher-end 5G services as network slicing offers another way for regional carriers to build out sustainable business.
Bommakanti called it the “third horizon” of 5G, ticking off possible use cases that could require dedicated connectivity: “In rural areas, we’re talking healthcare facilities, we’re talking educational institutions, we’re talking venues, perhaps special events that might happen — you know, a music festival or a car race or events of that nature that might happen periodically or annually.”
Stewart said Carolina West is exploring how it can provide enterprise 5G services for “smart building applications or even smart campus-type environments” but added that this isn’t like selling handsets and plans: “It takes a lot more sophisticated sales process.”
He said Carolina West may find it quicker to partner with or outright buy a company to get that competency.
Howell concurred, recalling a meeting with account executives at which she described these new business frontiers: “I kind of got this deer-in-the-headlights look like, what is this?” She said sales reps will “have to be much more technical minded.”
Welton noted US Cellular’s work with Ericsson at the University of Wisconsin to set up a private 5G network but also pointed to a less exciting line of business connectivity: “failover solutions.”
As in, businesses will pay for backup connectivity to ensure they don’t suffer downtime (on our panel’s prep call, Welton pointed to electric utilities as one such customer): “Wireless can come in and be a failure solution that works immediately.”
In other words, it always helps to provide a ready solution to a customer’s real-world problem.
Or as Howell put it: “We need to find a way to stay competitive, so they’ll want to stay with us.”
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