Technology capacities embedded in 5G technology standards will allow mobile operators to more finely tune fixed-wireless access (FWA) services to meet demanding market needs, according to a new report from ABI Research, though the market’s financial model remains in question.

The research firm noted the capability for 5G technology to support quality of service (QoS) requirements tied to unlimited data offerings will bolster support for FWA services. Increased spectrum support and enhanced antenna beamforming technology will also allow 5G-based FWA services to compete more directly from a performance perspective with wireline-based broadband services.

“FWA is one of the few use cases that utilize 5G massive multiple-input, multiple-output (MIMO) networks to their full extent, with a typical monthly utilization that could be as high as one [terabyte] per subscriber,” Fei Liu, 5G and mobile network infrastructure industry analyst at ABI Research, wrote in the report. “Many [mobile network operators] that have launched 5G are expected to offer FWA services, driving 5G FWA market growth.”

ABI Research predicts 5G-based FWA connections will hit 72 million worldwide by 2027, representing 35% of the total FWA market. It cited current and planned deployments in North America and Western Europe as driving market growth over this time frame, with markets like India expected to support ongoing growth.

Operators currently touting 5G-based FWA include T-Mobile US and Verizon, which have both reported strong recent customer growth and plans for targeted updates to their networks to continue to support that growth.

“We’re on a mission to become the best in the world at wireless, and we’re pursuing that mission ambitiously, and so far, very successfully,” T-Mobile US CEO Mike Sievert said about the carrier’s FWA efforts during its most recent earnings call. “That is the place where the future lies and where we want to be.”

T-Mobile US’ push is on the back of the carrier’s deep mid-band spectrum holdings that have allowed it to provide relatively high FWA speeds to customers. But, ABI Research’s Liu noted operators will have to use technology advances to manage network quality.

“MNOs should launch 5G FWA to utilize their network capacity to make additional revenue,” Liu wrote. “However, they need to be vigilant on how many FWA subscribers they can support and which type of service they wish to offer (best effort or QoS). In the long term, MNOs need to apply artificial intelligence (AI) techniques such as machine learning (ML) to evaluate their network resource, network capacity, and spectrum to ensure a steady 5G FWA growth. When the 5G FWA service starts to challenge their network capacity, these MNOs may have to deploy millimeter wave (mmWave) to guarantee the quality of their FWA services and overall network capacity.”

This challenge has been mentioned by many as a potential barrier to continued 5G-based FWA adoption.

Consulting firm PwC recently released a report that showed FWA services could cost more than 22-times as much as mobile connectivity services. This comes from costs associated with delivering data tied to specific latency or QoS service-level agreements (SLAs).

The report also found that FWA services could have up to 40-times less revenue potential. This is due to FWA services being price limited by competing fiber or cable internet options.

“Most FWA subscribers are willing to pay only as much as wireline plans cost, yet they expect a similar quality of service for internet connectivity,” the report notes.

PwC Partner Dan Hays explained during an interview at the MWC Barcelona 2023 event that operators should approach FWA and other alternative 5G connection services like IoT with reasonable financial and operational expectations.

“Fixed-wireless access is a great way to fill out excess capacity, if you have it,” Hays said. “You see some of the carriers making that play.”

Hays also noted that operators are getting better at managing their network resources.

“I talked with one of the carriers, and they said they’re actually analyzing down to the sector,” Hays said. “They’re looking at network loading to assess whether they can serve a fixed-wireless access customer in just that sector, so when you call up and you say, I want connectivity, they will tell you yes or no based on the physical location where you live and whether that sector typically has excess capacity.”

Unlike T-Mobile US and Verizon, AT&T has taken a cautious route, relying on fiber as a more cost-effective solution to broadband expansion. Similar to PwC’s conclusion, AT&T executives have expressed financial concerns with FWA technology.

“I don’t see its place long term in dense metropolitan areas, and I don’t see it in reasonably well-populated suburban areas. I don’t see the dynamic of that product, and I’ve been pretty clear about this. If I start to think about consumer behavior and demand of consumption, and I start to take those curves out over three years, I don’t see that as the optimal way to service a customer in the near term,” AT&T CEO John Stankey told investors during the carrier’s most recent earnings call.

Stankey also specifically cited the high cost of supporting mobile broadband using a wireless connection.

“Mobile bits are going to be higher-value bits. They’re going to need to be engineered differently. They should sell at a premium because of the supply-and-demand dynamics on it,” Stankey said. “And I want to ensure that my mobile network is, in fact, delivering that premium solution on those mobile bets when they need to be provided. And it’s absolutely 100% there to do that.”

Verizon is – publicly at least – unfazed.

“We’ve had critics of fixed wireless since the day we started talking about it,” Verizon CFO Matt Ellis said during a recent investor conference. “Like it’s a niche case product; won’t be able to work at scale; it’s only for customers who don’t have access to anything apart from DSL, or are in a rural area, or on the business side of a food truck. … Every single time that those items have been put out we’ve knocked them down. It operates at scale; we’ve got over a million customers and growing. It’s not just customers who were underserved before, we’re taking customers from existing providers. I hear that people say we’re gonna run against the wall here, but they’re arguing with the best engineering team in the industry when they make those claims. We feel very good about the runway we have with fixed wireless on 5G technology with the amount of spectrum we have – that we’ll have in place by the end of this year. There is there’s still significant opportunity there.”