AT&T is edging closer to a commercial fixed-wireless access (FWA) overhaul that could be challenged to improve on what the carrier is already offering while vectoring through specific market and operating bogeys laid out by AT&T’s management.

Jenifer Robertson, EVP and GM for mass markets at AT&T Communications, hinted during a media roundtable that the FWA refresh would hit the market this year. However, the carrier was currently not inclined to share details on its promised FWA refresh, but she said they “expect it to be competitive in the marketplace and certainly applicable to the target use cases that we've talked about all along.”

AT&T does offer a 5G-based FWA product and previously stated that it served more than 130,000 FWA customers.

Chris Sambar, president for network at AT&T, stated that the carrier’s refreshed FWA service would take advantage of its mid-band spectrum holdings, adding the carrier was sitting on around 120 megahertz of that spectrum. AT&T covered approximately 150 million potential customers with its mid-band spectrum at the end of 2022, with plans for 200 million potential customers covered by the end of this year.

What won’t be part of the mix is the carrier’s extensive millimeter-wave (mmWave) spectrum holdings, which continue to struggle with the long-standing laws of physics.

“What we found is propagation off of millimeter-wave towers is so short,” Sambar said. “That’s a very difficult value proposition to make work, so we are focused on serving it with our mid-band rollout spectrum.”

AT&T’s FWA efforts, however, could be stymied by the organization’s broader plans. AT&T CEO John Stankey noted during the carrier’s earnings call this week that its FWA plans will be targeted at a specific market segment that does not interfere with its fiber plans and require a specific marketing approach.

“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,” Stankey told investors.

Stankey also stated that the cost structure for FWA would require a different economic model.

“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.”

As such, the FWA product is likely to take an upscale tact compared to rival offerings from T-Mobile US and Verizon. Those operators are promoting 5G-based, unlimited-usage FWA services at around $50 per month, and in some cases half of that for current customers as part of a service bundle.

AT&T noted during its earnings call that its current fiber-based broadband service was generating between $65 and $70 per month in average revenue per user.

Stankey did note that FWA was a useful tool in AT&T’s toolbox, “with opportunities in areas that are less densely populated.” These are also areas currently served by AT&T’s legacy copper footprint that could struggle to provide the backhaul support for the service and negate AT&T’s attempts to better manage service costs.

“I think it can have an opportunity to help us on some of the long-standing hybrid-fiber copper base that we have that maybe has some speed challenges, and it will probably help us manage some of the churn characteristics associated with that, and I would expect to use it in that case,” Stankey said.

Analyst firms are predicting significant FWA growth opportunities for operators to help monetize their 5G investments.

Verizon has been aggressive with its FWA plans. CEO Hans Vestberg this week stated the carrier expects to grow that customer base from the approximately 1.4 million customers it had at the end of 2022, to up to five million subscribers by the end of 2025.

T-Mobile US has witnessed even stronger growth on the back of its extensive 2.5 GHz spectrum holdings. The carrier added 578,000 FWA customers during its third-fiscal quarter of 2022, pushing that total customer base to more than two million customers.

AT&T is also working through industry interest levels for its mobile edge compute (MEC) and private 5G services.

Rick Welday, EVP and GM for enterprise markets at AT&T Business, said the carrier was receiving “a lot of interest inbound to us from clients that are talking about what they’d like to do with mobile edge compute,” and that AT&T was preparing internal support for use cases.

“The biggest overall trend in the business segment is digital transformation,” Welday said. “As customers are moving off of more traditional MPLS, VPN-type of technologies into the cloud, that capability becomes more important for our customers. So we're getting a lot of interest.”

However, like rivals, the private 5G space is taking longer to solidify. “They're trying to better understand what we could do with our 5G network and where private might play a role,” Welday said.

Verizon’s Vestberg noted during the carrier’s earnings call that it had expected more momentum in the private 5G and MEC space, stating that while those markets remain a “strategic focus in 2023,” uptake so far has been tepid. Vestberg recently stated that Verizon’s MEC and private 5G opportunities could reach $2 billion by 2025.

Verizon CFO Matt Ellis specifically noted that private 5G adoption has been “a little slower than maybe we would have liked, but as you heard from Hans in the prepared remarks … we’re starting to see some momentum there. So I still feel good about the opportunity there, but the pace of the adoption curve a little different than we hoped it might be. But the upside there still looks very good.”

AT&T’s Sambar did not dismiss the market but did note it was still evolving.

“There's opportunities for private 5G, but I think our competitor really blew that up,” Sambar said. “This is a great use case and a great growth opportunity for them, and I think they’ve backed off on that a little bit now because they're seeing the reality of the market.”

Amir Rozwadowski, SVP for finance and investor relations at AT&T, echoed that sentiment, adding the carrier was waiting to capitalize on potential market opportunities.

"Ultimately, as those opportunities avail themselves to the market, however sized, we would imagine that we would be a robust participant in those, in capitalizing on those opportunities," Rozwadowski said. "It's just a question of timing and where we set our own expectations relative to the market. And that's really kind of where we've held for ... some time."

CORRECTION: The headline has been corrected to note AT&T is maintaining interest in the MEC and private 5G space.