AT&T CEO John Stankey has publicly stated that fixed wireless access (FWA) is a great tool to capture customers who don’t have a satisfactory fixed broadband connection — including AT&T’s own DSL customers. FWA allows AT&T to keep those customers until it has a chance to deploy fiber-to-the-premise (FTTP) in their areas.
Now, Analysys Mason has published a report studying some other telcos and their strategies for offering FWA.
“FWA’s quick installation processes mean that operators can onboard FWA customers in areas that have not yet been reached by FTTP,” wrote the analysts. “FWA customers can be upsold to FTTP later.”
One operator that is following AT&T’s playbook is Vodafone UK. It markets FWA in areas that don’t currently have fiber coverage, with the aim of converting customers to fiber, later.
Vodafone only targets areas with spare network capacity to avoid impacting the quality of its valuable mobile services. When a customer wants to sign up for Vodafone’s FWA, a sales agent must check to make sure there’s enough excess capacity on the network.
“Vodafone had originally launched FWA without this geographical targeting, but customer experience was poor, and, as a result, churn was high (approximately 50%),” said Analysys Mason.
T-Mobile
In terms of monitoring excess capacity, T-Mobile is the leader. The Seattle-based carrier has been extremely diligent about not letting FWA degrade the quality of its regular mobile services. “Its processes for measuring fallow capacity are the most advanced of the operators studied in this report,” stated the analysts. “It forecasts traffic at each base station, to plan the number of 5G FWA users it can support at each location without hindering network performance.”
T-Mobile is not following AT&T’s strategy of using FWA as a place-holder until it can deploy more fiber. That’s mainly because T-Mobile has not traditionally been a fiber provider, although it is making moves to get into the space.
T-Mobile’s FWA strategy, so far, has been to steal broadband customers who are not happy with their legacy cable services.
As of its Q1 2024 earnings, T-Mobile counted 5.2 million FWA subscribers.
“T-Mobile has adopted a competitive pricing strategy that aims to attract new customers from incumbent cable operators and to upsell FWA to its existing mobile customer base,” stated Analysys Mason.
Verizon
Verizon is also interested in using FWA to steal market share from cable.
“When consumers take mobile services from Verizon, the cost of also taking Verizon’s FWA is much lower than the monthly cost of fixed broadband from the two largest cable operators,” said Analysys Mason. “It also provides a one-off $500 voucher to cover the cost of early contract termination if a new customer is churning from a cable provider.”
Although Verizon has a substantial FTTP business, it hasn’t indicated any intent to use FWA as a stop-gap measure to capture customers while it rolls out more fiber to their areas. Rather, it is offering FWA in areas not covered by Verizon’s fiber network.
“Verizon is confident that it has enough network capacity in these areas to accommodate further growth in the number of FWA connections in the long term,” stated the analysts.
Network capacity for FWA
Recently, the analysts at New Street Research calculated that the top four U.S. wireless operators could support as many as 16 million FWA subscribers in total before running out of capacity on their networks. That could be seen as good news by cable operators who are seeing competition from FWA.
But Martin Scott, one of the authors of the Analysys Mason report said, “Maximum capacity doesn’t matter if converged players use FWA as a ‘stepping stone’ technology en route to fiber. That’s a less relevant point for Verizon who, whilst having a well-established fiber base, also plans to maintain FWA for the long term, but it’s an important consideration for T-Mobile.”
T-Mobile is just beginning to become a “converged player” as it pursues its fiber rollouts. The company has a goal of serving 7-8 million customers with FWA. Martin said that ultimately these customers comprise the pipeline for T-Mobile to capture cable customers, hold them for awhile with FWA and in the long-haul potentially move them to fiber.
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