How do I encapsulate 12-months’ worth of highs and lows across the telecommunications and networking space? By picking what I view as the five biggest telecom trends of 2023, that’s how.

(And not to give the ending away, but Taylor Swift did make the cut.)

Strong FWA growth

Fixed-wireless access (FWA) entered 2023 on a high with established providers T-Mobile US and Verizon both counting millions of connections tied to their respective FWA systems. That growth continued throughout 2023, with both operators basically doubling their FWA connection counts and further bolstering what is a major area of growth for the industry.

That momentum eventually drew a response from AT&T, which had repeatedly downplayed the long-term viability of a spectrum-heavy broadband service.

FWA is exiting the year as one of the few 5G-based use cases driving new revenue opportunities for operators.

“I love that 5G use case,” Joe Russo, EVP and president of Verizon’s global networks and technology business, bluntly told SDxCentral at this year’s MWC Las Vegas event. “It’s great for us and I think great for our customers to give them more broadband choice.”

Private networks, MEC, 5G SA stalls

While FWA was a 5G boon, private 5G, mobile edge computing (MEC) and standalone (SA) 5G cores all stalled in 2023.

The private 5G space remains rich with opportunities, but operators and network providers continue to search for compelling use cases and enterprise customers facing macroeconomic headwinds. One bright spot has been the government and military space, which has shown strong support for private 5G network systems.

MEC opportunities have also been slow to mature as, similar to private 5G, there remains a lack of compelling use cases that require MEC’s low-latency advantages. There also remains some confusion over who is the best positioned to provide a financially viable MEC platform: operators or hyperscalers.

The launch of 5G SA cores also stalled this year as many top-tier telecom operators continued to operate their SA cores on a limited basis. While those that have launched their 5G SA cores, like T-Mobile US, continue to tout operational efficiencies, others have been flummoxed by deployment and operational challenges.

Telecom capex pullback begins in 2023

Further impacting the launch of these new systems has been the move by operators to slash their network spend. This has been done under the guise of operators having moved through their initial multibillion-dollar 5G network deployments and now wanting to take a financial break to see a return on those investments before plunging billions more into their next round of advances.

AT&T CFO Pascal Desroches told an investor conference this year that the carrier would be “past peak investment as we exit this year. … Clearly we don’t expect to be at the levels of capital you’ve seen us invest in 2022 and 2023.”

This sentiment was echoed by Verizon, which is also winding down its mid-band spectrum deployment investment. The carrier said it remains on track to spend up to $19.25 billion this year, but that next year’s spend will be closer to $17.5 billion.

This move has been most felt by network equipment vendors like Huawei, Ericsson and Nokia, which have all seen their bottom lines hit by this decrease in capex.

BEAD program’s billions

That capex pullback could be short lived if the federal government has anything to say about it.

The U.S. government in June allocated $42.5 billion in funds as part of the National Telecommunications and Information Administration’s (NTIA) Broadband Equity, Access and Deployment (BEAD) program, which was itself part of the federal government’s $65 billion Infrastructure Investment and Jobs Act (IIJA).

The BEAD program funds will be distributed to all 50 states, the District of Columbia and five U.S. territories to expand broadband access, with equipment tied to that expansion required to be built in the U.S.

“I think it is going to incentivize companies to go and build infrastructure that maybe they would not have otherwise because the ROI [return on investment] isn't there,” Andrew Fedele, technology, media and telecommunications senior analyst and director at consulting firm RSM told SDxCentral in an interview.

Telecommunication providers and vendors spent 2023 positioning themselves toward getting a cut of that funding action, which is expected to be used to support fiber, FWA and potentially satellite communication expansion.

“We have had significant traction from several service providers, including tier-two and tier-three service providers that will be making investments and getting funding from the BEAD initiative,” Nokia CEO Pekka Lundmark said, adding that this opportunity “will start coming gradually during 2024.”

Spectrum for ‘Swifties’

Spectrum played a large part in operators expanding the scale and scope of their 5G networks in 2023.

So-called “mid-band” spectrum, which sits between 2.5 GHz and 6 GHz, was core to these advances as operators spent billions of dollars to extend the reach of their networks. Verizon and AT&T both tapped their extensive C-band spectrum holdings to push their high-speed 5G coverage to more than 200 million people, while T-Mobile US did the same in pushing its deep 2.5 GHz spectrum holdings to cover more than 300 million people.

The industry also increased its focus on using millimeter-wave (mmWave) spectrum to help boost network capacity. Much of this was tied to spectrum aggregation trials that combined those coverage-challenged spectrum bands with more forgiving mid- and low-band spectrum to support revenue-generating use cases like FWA and private networks.

“I joke with my kids more than anything, but if you’ve been to a Taylor Swift concert, all of those people — our customers — are there and they want to stream that experience with their friends and family and you couldn’t do that in a 4G world. There just wasn’t the kind of capacity,” Verizon’s Russo said at a recent investor conference. “We have found that we’ve enabled and unlocked that capability in venues with millimeter wave. There’s no way we can deliver that kind of experience for our customers without millimeter wave.”