AT&T this week pledged an additional $3 billion over the next several years to support the reach of broadband services, with some of that reach set to extend from the carrier’s fixed-wireless access (FWA) service that has been a significant broadband growth driver for its rivals.

AT&T’s latest financial pledge is on top of the $2 billion it has already angled toward broadband expansion since 2021, pushing its total pool to $5 billion. The new funds are targeted at “the main barriers to connectivity — affordability and adoption — for those who need it most.”

The carrier cited plans to support ongoing subsidization programs, including the 37 Connected Learning Centers it operates using equipment from Dell Technologies and are targeted at underserved communities, and to offer lower-cost broadband options to customers that might lose service subsidies tied to a government funding fight over the Affordable Connectivity Program.

“Connectivity is critical for success and prosperity in America today. Whether it’s a first-generation high school graduate applying for college, a veteran accessing telehealth services or a grandparent connecting with their family thousands of miles away — we want to help unlock greater possibility for the millions of people who remain unconnected,” AT&T CEO John Stankey noted in a statement. “The pace of innovation and the global economy aren’t waiting on anyone, and we’re committed to bringing connectivity and digital literacy in reach for all Americans.”

AT&T's pledge did come on the heels of the carrier admitting to a cyberattack that bled account information for more than 70 million current and former customers onto the dark web, and a nationwide network outage blamed on “application and execution of an incorrect process used while working to expand our network.”

From a network perspective, most of AT&T’s broadband connectivity services will continue to flow through its fiber footprint, which continues to be the workhorse of the carrier’s broadband traffic. But that traffic is set to increasingly move through the carrier’s 5G-based FWA service.

The carrier officially launched its Internet Air service last August, which was focused on the consumer market and had modest rollout and adoption expectations. That modesty was apparent as the carrier added approximately 93,000 FWA connections through the end of last year. Rivals T-Mobile US and Verizon, in contrast, each added around 500,000 new FWA customers during the fourth quarter alone.

AT&T more recently expanded the reach of its FWA service and added an enterprise-focused option that meets the carrier’s oft-touted financial parameters.

“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 during an earnings call last year. “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.”

AT&T’s management has been more vocal in expressing the enterprise opportunity for the FWA service, especially when it comes to a financial return.

“We understand the cost to serve bandwidth on a mobile network is much more expensive than a fixed network,” AT&T CFO Pascal Desroches told attendees at an investor conference earlier this year. “And if you are a high-consumption user … you’re selling a product at a discount to fix and it’s going to cost you more to serve that product. We never thought the economics were attractive long term to use it as a solution for consumers on a broad-scale basis, and our views on that haven’t changed. While it may feel good today to those that are really leaning in, over time the cost to continue to add capacity to the network will make many of them rethink the offering.”

That financial angle is becoming increasingly important as FWA usage booms.

U.S.-based FWA service providers added nearly 3.7 million new connections last year, according to a recent report from Leichtman Research Group, which was 15% more than the market added in 2022. More significantly, the research firm found last year’s FWA growth accounted for 104% of the total net broadband additions for 2023, compared to 90% in 2022, and just 20% in 2021.

Nearly all of last year’s FWA connection growth was on the backs of two operators: T-Mobile and Verizon. Those two finished last year with a combined FWA base of nearly 7.9 million connections.

That growth has been bolstered by relatively inexpensive price plans.

A recent report from Parks Associates found 66% of customers subscribing to an FWA service from a wireless operator “consider their plans to be at a fair or good price.” This was a significantly higher sentiment than the 51% of fiber customers and 35% of cable subscribers who felt they were getting a good deal.

But with that good deal comes a good amount of usage.

T-Mobile CEO Mike Sievert previously told an investor conference that the carrier has designed its network to support up to 80 gigabytes of usage per month by each customer. However, T-Mobile EVP and CTO John Saw said during a keynote speech at last year’s MWC Las Vegas event that its FWA customers were using around 450 gigabytes of data per month.

Analysys Mason stated that operators it has interviewed have cited average traffic volume for FWA customers was 10- to 20-times that of handset customers.

“This poses a problem for operators,” Analysys Mason analyst Oliver Bruff wrote. “FWA customers can reduce mobile handset customers’ quality of experience (QoE) if network performance is reduced by traffic from FWA. It can also lead to revenue cannibalization if operators onboard a small number of FWA customers instead of a large number of handset customers.”

Operators have been aggressive in bolstering their networks to support this level of growth. This includes tens of billions of dollars spent over the past several years to deploy mid-band spectrum in support of more usage and higher speeds, efforts that have so far paid off.

Network speed test monitoring firm Ookla found in a recent test that 5G-based FWA services from Verizon and T-Mobile provided median download speeds of around 122 Mb/s. That speed was nearly consistent over the past four quarters of testing on T-Mobile’s network, with Verizon’s FWA network speeds improving slightly over the past year.

This level of FWA growth is also happening worldwide as operators and countries look to extend connectivity.

A recent ABI Research report noted that this level of growth is also happening around the world. It predicts FWA connections will grow at a 14% CAGR through 2029, totaling 265 million connections.

“As the demand for a more connected world continues to grow, the performance and efficiency of FWA technology remain a key driver in bridging the connectivity divide, providing high-speed, reliable internet access in both the enterprise and consumer markets,” ABI Research analyst Larbi Belkhit wrote.