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Wireline networks using copper or fiber have traditionally been the preferred choice for delivering fixed broadband services due to their high capacity and resilience, but the need for universal connectivity means that alternatives to the wired network are more in demand than ever.

In future, service providers will need to consider a range of technology options to meet customer needs and service obligations. These technologies include fixed wireless, which has recently been enjoying a global resurgence.

The much-anticipated launch of 5G fixed wireless services later this year promises users a first taste of next-generation services. But LTE-based FWA is already proving capable of delivering sustained, high-quality broadband access under a variety of market conditions in a host of different usage scenarios.

Large-scale fixed wireless networks are already being developed by the likes of Softbank in Japan and Zain in Saudi Arabia, as well as by a host of service providers in markets around the world. Leveraging mobile spectrum assets enables operators to target a number of market sectors. These include untapped rural populations with no home broadband, but also hard-to-reach fiber black spots and more densely populated areas. Increasingly, FWA is being employed to acquire higher ARPU customers through rollout of networks in urban and suburban centers, delivering content-rich services to the home broadband market.

Fixed wireless technology is also being used to provide a flexible, high-speed replacement for legacy fixed network connections such as DSL, and to penetrate valuable customer segments that would otherwise not sign up for home fixed broadband solutions, such as tourists, foreign students, and renters.

Ovum forecasts that LTE-based FWA will account for more than 40% of all fixed wireless broadband subscriptions by 2022, with 5G FWA accounting for 16%.

Recent advances in fixed wireless technology and self-install CPE are further enhancing the opportunities for FWA in the urban home Wi-Fi market, where the opportunities for early payback can be favorable. A recent Ovum study found that in a range of urban and suburban scenarios, a newly built LTE-based FWA network capable of delivering speeds of up to 50Mbps can achieve monetization significantly faster than equivalent wireline options can.

Delivering broadband access to remote rural communities can present a more challenging business case, with the prospect of prolonged payback periods due to sparse populations and low subscriber ARPU. However, there is scope for regulators and governments to assist fixed wireless providers through the easing of barriers and provision of financial stimuli to local services.

In rural areas, delivering a minimum level of performance for all subscribers also tends to outweigh the need to provide gigabit access for the few, and a sustainable throughout of tens of Mbps cannot only be adequate for most users' needs and sufficient to support a range of services, but also more economically viable.

In addition, equipment providers point to a number of factors that are delivering a more positive business case for FWA, from reusing radio network assets and fiber plants to making more efficient use of spare cell capacity on the existing network that arises from the uneven traffic distribution associated with smartphones. Unlike in a mobile network, fixed wireless connectivity can also be designed to deliver a guaranteed and sustainable level of service to the customer.

Forward planning for network expansion as user take-up increases will be critical, however, and service providers can improve ROI through on-demand expansion and by exploring new business opportunities in the smart home and enterprise markets.

Straight Talk is a weekly briefing from the desk of the Chief Research Officer. To receive this newsletter by email, please contact us.

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