A big play for fixed wireless – CBNL’s US predictions for 2019
With 2018 behind us, it’s time now to look ahead to a new and exciting year for our industry.
In the last two years, it has been widely accepted that fixed wireless access (FWA) using mmWave spectrum has a significant role to play in the rollout of 5G. With the FCC hosting auctions at 24GHzand the bands above and the introduction of the first mainstream 5G use cases – as recently took place in South Korea – we expect adoption of FWA to proliferate throughout 2019.
Here’s a snapshot of how we think that will come to pass through the year ahead:
Millimeter Wave Spectrum Auctions
In its bid to promote the deployment of fifth-generation (5G) wireless, the Internet of Things (IoT), and other advanced spectrum-based services at frequencies above 24 GHz, the FCC opened its 28 GHz auction 101 in mid-November. The auction is still going with total bids approaching the $700 million mark, but activity has slowed and it is expected to conclude in the next couple of weeks. This auction is mainly comprised of smaller cities and rural areas and covers only about 25% of the US population. Even still, with the status of current bids, this puts the auction on par with or exceeding the Straightpath pricing metrics for the more populous license areas such as Mobile, Alabama; Charleston, South Carolina; and Honolulu, Hawaii.
On the other hand, many of the very rural licenses only have bids in the hundreds of dollars. On average the current pricing across all markets is around $0.011 per MHz-pop, with the most populous markets fetching 5 or 6 times that. Auction winners will not be revealed until the auction comes to a close, but we would expect Verizon to pick up higher tier markets to round out their national footprint of 28 GHz spectrum and regional telcos will pick up licenses within their respective service areas for future FWA and mobile 5G services.
Auction 102 for 24 GHz spectrum will kick off immediately following the 28 GHz. These licenses are for much larger geographic areas compared to auction 101 (counties) and are completely unencumbered. We assume there to be intense bidding for these licenses by the likes of AT&T and T-Mobile as they try to create national 5G mmWave footprints. Cable companies, such as Cox, and WISPs like Starry and OneRing will likely compete for select licenses in their target service areas.
At the FCC’s December 12th meeting, the Commission voted to move ahead with upper 37, 39, and 47 GHz spectrum auctions towards the end of 2019. The 38/39 GHz spectrum is still full of RSA encumbrances as well as the legacy channel interleaving so it will likely take much of 2019 for that band to be cleaned up and ready for auction. The 37 and 47 GHz bands also have some satellite and government encumbrances. As such, winners of the 24 and 28 GHz auctions will have a slight head start with both spectrum and equipment availability relative to the other mmWave bands to be auctioned later this year.
Carrier-grade Enterprise Access
The national carriers like Verizon and AT&T have largely kept away from fixed wireless for enterprise access, instead focusing on expanding their metro fiber footprints. That could begin to change in 2019 and 2020 depending on the success of their 5G fixed wireless residential deployments. Local and regional CLECs, like Windstream and TPX have embraced fixed wireless and they should continue to expand their deployments in 2019, especially as they get access to more spectrum. For the competitive carriers, fixed wireless offers a facilities-based option to provide carrier grade enterprise access without the expense of trenching fiber. They can also use it to offer a true diversity solution for enterprises that require continuity of service.
Residential Broadband
Verizon began to deploy a non-standards based 5G fixed wireless solution in select residential markets through the second half of 2018. We would expect to see those deployments expand in 2019 and eventually replaced by fully standards-compliant radio units. AT&T has tested and expressed interest in offering 5G residential FWA service, but they need to sort out their mmWave spectrum situation first, so likely will not explore commercial residential deployments until later in 2019. Local and regional telcos and WISPs will likely be more active with residential fixed wireless as they get access to additional licensed spectrum in the mmWave bands as well as the lower frequency CBRS band.
In 2019 we should also see an expansion of fixed wireless for serving Multi Dwelling Units (MDUs). Established providers like DirecTV as well as start-ups like Starry view fixed wireless as a cost-effective way to provide competitive broadband Internet services to MDU customers versus the traditional LECs and cable companies. Customers would then purchase over the top content.
So, those are thoughts. If you would like to discuss how FWA can help your business in 2019 or beyond, please do contact us at enquiries@cbnl.com.
I look forward to speaking with you.
Eric Miller
VP 5G Business Development
CBNL