‘FWA pricing to be similar to broadband’
4 min read . Updated: 26 Feb 2023, 11:38 PM IST
PremiumIndia offers a massive opportunity for telcos to monetize their investments in FWA
New Delhi: Fixed wireless access (FWA), which offers high-speed internet without fibre or cables, will have over 300 million connections worldwide by 2028, and 80% of it will be on 5G, John Yazlle, head of fixed wireless access at Ericsson, said in an interview. India offers a massive opportunity for telcos to monetize their investments in fixed wireless access. Though a key challenge is the prohibitive cost of routers that will be addressed as prices go down due to a steep rise in scale of deployment. Edited excerpts:
What is the outlook for FWAs, globally?
We track 310 operators in over 100 countries, of which 75% have FWA and, of those, one-third are on 5G so far. For half of our 5G live networks and FWAs, we see more FWA launches. Last year, 40% of the new 5G wireless launches was in emerging markets as we saw more spectrum auctions. For the long term we expect the 5G fixed wireless installed base to grow. We have closed 2022 with about 100 million connections, majority of which were 4G. By 2028, these numbers are expected to grow three times to 300 million and 80% of those will be on 5G.
How will demand shape up in India?
In India, we see a very good opportunity for FWA. India is very large and Indians are willing to use technology. We saw strong adoption of 4G, and expect similar strong adoption of 5G. Less than 10% of homes are connected, so there is a large market of unconnected homes and we know digitisation is important in India, and people want fast and reliable broadband. So, FWA will be one key for closing that digital divide and we expect communication service providers to monetize on that opportunity. I expect FWA to take a share of the broadband connections, of say, 300 million homes across India. There will be a migration to get reliable broadband from either Wi Fi or 5G FWA. Also, we feel that in the coming years, more and more homes will be able to afford broadband. These factors will define the market in the long term.
The high cost of routers is a key prohibitive factor for launching FWA in India and use cases may not be viable as of now. Can this be addressed?
We expect the cost of FWAs to fall. First, because the 5G ecosystem is growing and it is so far the fastest mobile generation. By the end of the year, we will reach 1 billion 5G connection globally, which will be two years faster than 4G. As devices became affordable as a result of global scale for 4G, I expect similar type of development on 5G at a faster clip. On cost you may have different flavours of fixed wireless with diverse demands on high- and low-end FWAs.
Having speed-based FWAs, with several 100 MBs or GB-based speed, which has a high price point, and other offers at lower speeds and another price point, for devices as well as consumers. This is similar to fixed broadband. India is a large country, so I would expect to see different offers dressed in different price points. On a broader level, we expect these wireless pricing to follow the fixed broadband pricing, and the main correlation is higher speeds, higher prices, lower speeds, lower prices.
What has been the Arpu increase from FWA deployments among global telcos? What is it likely to be in India?
The key revenue driver for telcos is adding more connections. If 10% of homes in India have fixed broadband, you will have more connections which will be priced at similar levels as fixed broadband. That’s the dynamics of it. Globally, we see an addressable market of unconnected homes or low-speed, copper-based broadband, which is over one billion premises. So, 300 million is a fraction of that. The 300 million on their own will be paying for additional broadband, and we estimate that the revenues for telcos globally will be around $67 billion by 2028. If I take on for the mobile operators, these will be additional revenues on their profit and loss, of close to 7.5%. These are the global numbers. We’re going to see variations, some countries that will be much higher, some will be lower.
FWA is being talked about as a replacement to fiber. Is that plausible for markets like India?
I see FWA complementing fiber, bringing connectivity where there is no fiber or bringing competition where there is fiber or cable.
Is FWA a better suited product for retail customers or for enterprise, in terms of use cases and monetization?
We have seen both cases globally. There’s a large opportunity in the number of connections as there are many homes that are connected globally. Then there is an opportunity for micro, small and medium enterprises that need broadband connectivity. We have seen some operators having large success on that. Maybe the best example would be Verizon, US, where 40% of the 5G FWA now is for businesses, and 60% is for consumers.