INTERVIEW: OPERATOR CONFIDENCE DRIVING FWA MOMENTUM INTO THE 5G ERA


Fixed wireless access is one of the fastest growing operator services, as consumers tap into high quality LTE networks and early stage 5G. Mobile World Live talks to Greger Blennerud, Strategic Marketing Director at Ericsson, about the technology’s potential.

GREGER BLENNERUD


Strategic Marketing Director Ericsson

Question:


What has been driving the growth of operators offering fixed wireless access solutions?

Answer:

I think the dramatic change we have seen in the past one to two years is very much because of performance. Back in the 3G era it was barely an alternative for DSL. It could help in some areas, where you could split the stream on your DSL and on your 3G broadband connection and get higher performance together. It's been used but it's been used as a complement mainly, it wasn't really that successful and hadn't been pushed that much.

Then as 4G evolved with the performance and capacity increase, we were starting to talk about 50 and 100 megabits per second. Suddenly this realisation hit that operators could cover a whole set of households and actually provide a really competitive service to them. And now we're talking about hundreds of megabits per second so the technology has been brought up again in the boardroom. There's a self-confidence that's apparent from operators that they feel that now they actually know that they can deliver.

Question:


In addition to the evolution from 3G to 5G, is there anything else that has changed from previous generations of the technology?

Answer:

The price points of the devices have come down as more companies get involved in the market. The devices themselves have also become more sophisticated, offering all the latest connectivity and speeds. Installation has become much easier, which has probably helped operators make the decision as well. We've seen apps that you download and then you can walk around the house with your phone and router to test and find the best position for the device. There's also been a little bit of a learning process. Early on most operators launched it and sold it without much planning and anybody would just walk into the store and pick one up. But if you wanted the high performing fixed wireless access offering from operators today, it's really about building the business case around each selected area where they want to launch. That's the nice thing about it; it allows the operator to be selective and they can say, 'Okay, we have now upgraded these base stations in this area. Or in this area we have a lot of unused capacity. Let's go ahead and market fixed wireless access here'. Then you can decide on where's your break even and all the other financials.

Question:


What are the market opportunities for fixed wireless access?

Answer:

It's huge. There are around one billion households today without a fixed broadband connection. That's a completely untapped market, connecting the unconnected. There's been a shift from linear TV to on demand, where people are tired of paying for hundreds of channels that they're not using. The bundling principle that has been prevalent, especially from cable operators, is maybe not necessarily the best way forward for this new cord cutter generation. They would really rather have just really good broadband and then select whatever services they want.

The market growth potential is going to be slower obviously than the smartphone market because we're talking households; it is a bigger investment and probably a slower decision-making process. But at the same time, FWA is showing higher take up rates than fixed broadband has ever done, much higher even. We are seeing operators report 3-6 times higher connection growth in FWA vs their fibre operations for example. And that’s driven by the consumer really seeing the convenience of getting the connection right when you made the decision, not 3-6 months later.

Question:


Which geographical markets are the biggest opportunity for FWA?

Answer:

In the long term, it's obviously going to be the markets where you have no or very little fixed broadband - Latin America, Africa, large parts of Asia, Eastern Europe and so on. Short term, it might actually be in countries, regions and markets where you have government programmes in place to connect the citizens. In Sweden, we have set government targets that everybody should have the possibility to get X megabits per second before the end of a certain year and so on. Even in markets with high fibre penetration, there are still large portions of the market where it will be much quicker to reach with 5G and still achieve the same experience. In the early discussions in the Swedish government initiative, people were only talking about fibre being the solution to deliver about 100 megabits per second. But now they’re technology agnostic as they realise that 5G is going to be able to deliver on the targets that they've set, even though they are actually higher today. I think many, many regulators and many governments are thinking in the same way.

Question:


How would you suggest operators position a FWA offering?

Answer:

I think the way fixed operators have positioned broadband before. It is a household proposition. I would advise against pushing MiFi type devices. The challenge with that kind of device is it behaves similarly to a smartphone, meaning you don't know where it ends up in the network, but they consume huge amount of data. It makes for a much more difficult business case than with any of the other devices that you have. Whereas with the fixed wireless access service, one key thing that we've seen in consumer studies is that a major purchasing trigger is in being able to get it today. Rather than have to wait three months for the build out, the guys to come and dig up your road, then you have to schedule a date for them to come to connect it in your house, you can just go and pick it up. That's one clear thing that operators should capitalise on positioning it both price wise and packaging wise. Providing some sort of installation service, especially for outdoor devices/antennas, is also worth considering. Using outdoor devices/antennas can provide 2-3 times better capacity so it could certainly provide value to the operator being able to cater to more households per site.

I think in markets where there's very low penetration of fixed broadband, the bucket model of data would still work quite well. If you're targeting areas where there's already existing fixed line services, then you probably have to go with what model they are using.

However, when we researched this area, we went to the operators' websites and tried to find their FWA offers. We felt it's so much more difficult to find the fixed wireless access offer than some of the others and that there's very little joint marketing between the various parts of the business. I think that can be done better to lift it up, highlight it and do promotions.

Question:


How do you anticipate this market growing in the next 5-10 years?

Answer:

We've seen a dramatic increase in the number of operators offering fixed wireless access. We're expecting a threefold increase in connections to 160 million by 2025. There are of course billions of smartphone users so fixed wireless access connections will only be a small percentage of that but they will be consuming 25 per cent of all mobile data. That's proven the potential of it. The numbers that we're seeing, both in terms of traffic and the increase in operators offering it, has surprised quite a lot of people internally at Ericsson. So I am really upbeat for the future of this technology.