Verizon and T-Mobile US both hit 5G-based fixed-wireless access (FWA) connection milestones during the third quarter, which initiated new connection goals that show continued consumer and enterprise growth expectations and come at a time when rival AT&T continues its side-eyed approach to the market.

Verizon ended Q3 with nearly 4.2 million 5G-based FWA connections on its network, surpassing the low-end of its long-standing target range 15 months early. More importantly, those connections were generating more than $500 million per quarter in revenue, which is a small but significant revenue stream for the carrier that claims a big return on a small investment.

“We can see that we can build on this network, where we build the network once and we want as many profitable connections on top of it, it started paying off,” CEO Hans Vestberg said during the earnings call.

Verizon wants to extend the pay off by continuing to grow that FWA connection base. It’s now shooting for up to 9 million 5G-based FWA connections by 2028, which will come from an increase in availability and market presence with plans to extend availability to 90 million households.

“We built a shared multipurpose network with owners' economics to serve as many profitable connections as possible,” Joe Russo, EVP and president of global networks and technology at Verizon, explained during the earnings call. “That strategy is built on the foundation we call the Intelligent Edge Network, which is rooted in our rich fiber assets, both in the ultra-long-haul network and in the metro networks across the country. It also encompasses our converged IP core and our owned and operated Verizon Cloud platform and our mobile edge computing platform that serves both today's and tomorrow's technologies. This foundation gives my team and I the capability to provide that best, most reliable, highest performing network to two access technologies.”

Verizon’s FWA push will also run on its extensive millimeter-wave (mmWave) spectrum holdings and a multi-dwelling unit (MDU) service that it will start rolling out commercially next year. This includes a service push into the enterprise space.

“A lot of these MDUs also have stores or businesses in them, and so we'll be able to leverage that investment as well to increase our market share in this area,” Kyle Malady, EVP and CEO of Verizon’s Business Group, said during the call.

Russo added that Verizon had also recently launched a “100% virtualized 5G core network” that is its 5G standalone (SA) core supporting network slicing capabilities, and that 40% of its 5G cell sites using its 3.5 GHz spectrum were running virtualized radio access network (vRAN) equipment.

Verizon’s FWA acceleration plans follow that of rival T-Mobile US, which surpassed 6 million total FWA customers at the end of Q3 and recently stated it has a new goal of 12 million FWA connections by 2028.

Most of T-Mobile US’ initial FWA growth has come from the consumer segment, and particularly from wireline rivals. “The majority comes from cable,” CEO Mike Sievert said when asked where the carrier’s FWA connections were churning from.

However, Callie Field, president of T-Mobile’s Business Group, also said that the carrier’s enterprise segment posted its best activation quarter on record.

This is significant as that segment is viewed as driving the best financial metrics.

A recent Rethink Technology Research report noted that U.S.-based FWA services are generating around $58 per month in revenue per connection, with enterprise opportunities set to drive further penetration.

“For the larger operators, which are in the business of providing commercial and enterprise services, FWA could be used as a great upselling tool,” the research firm wrote. “For business premises in underserved locations, FWA opens the door for upselling various additional software and networking services. For those using wireless as a failover connection, a robust FWA service could help displace the ISP providing the primary connection. For business with lots of locations, FWA could help reduce the connectivity charges they face, and provide a clear motivation from this total cost of ownership perspective.”

UScellular CEO Laurent Therivel during a keynote at the recent Mobile World Congress (MWC) Las Vegas event provided further color on this opportunity.

“The interesting thing about enterprises is they actually use a lot less data than consumers do,” Therivel said. “Kudos to all of you. You’re probably still watching YouTube and TikTok when you’re at work, but you’re not watching quite as much YouTube and TikTok as your kids do at home, and so your usage is 50% that of a consumer household.”

That enterprise opportunity has also gained momentum from operators offering 5G-based FWA connectivity as a backup to traditional wired connectivity.

Therivel explained that UScellular’s average backup solution was providing 22-times the revenue-per-gig of the carrier’s consumer-focused FWA service.

“It’s not because I’m charging 22-times more,” Therivel added. “I actually charge very little for that backup solution. It’s because usage is so small and so there’s this big opportunity to go after enterprises to provide those backup solutions, even those primary solutions, because the revenue is attractive.”

AT&T remains skeptical on 5G FWA

While Verizon and T-Mobile US are accelerating their FWA plans, AT&T remains stoic on the market.

CFO Pascal Desroches stated that the carrier added a modest 135,000 FWA connections during Q3, pushing its total customer base to nearly 500,000 FWA connections. Desroches also simply stated that the carrier was “excited” about 5G FWA growth opportunities in the enterprise space.

The carrier earlier this year launched an enterprise-focused version of its Internet Air FWA service. John Blinkiewicz, VP of enterprise mobility at AT&T, at that time said the service was targeted at small- and mid-sized enterprises in areas where “we have a broadband presence but obviously capture opportunity where we don’t have broadband out of region.”

Despite the service updates and growing market momentum, AT&T CEO John Stankey is maintaining modest expectations.

“I'm very comfortable with where we're at on Internet Air,” Stankey said during the earnings call. “As I've said many, many, many times, you shouldn't expect that AT&T is going to look like some of our competitors in the industry on volume. … We're using it, as I've said before, very strategically. I'll sell to any business customer that is well suited to the product, that's an attractive market to us.”

However, Stankey remains skeptical of the overall market viability.

“In some cases, we're using it to migrate people off of copper so that we can ultimately turn down costly service areas and not have to support the legacy infrastructure that's in place and occasionally in markets where we have surplus spectrum that we know will be in place for many, many years,” Stankey added. “It's really kind of a fallow dynamic and we can get the right kind of returns on it. But that rate and pace is never going to rival what you're seeing with anybody else, and you should just assume that's the case.”