Alphabet subsidiary Google Fiber, part of one of the largest, most lucrative, well-funded, technologically advanced companies in human history, had grand plans for deploying fiber-to-the-home and offering consumers gigabit per second broadband as well as a television offering when it started in 2010. After an ambitious expansion plan gave way to very slow deployment and activations in early markets, the company scaled back and put a pause on new market entries to regroup.
Reposted Article written By Sean Kinney, Managing Editor on
When this happened last year, Scott Cleland, president of consultancy Precursor and former deputy U.S. coordinator of communications and information policy for President George H.W. Bush, called Google Fiber’s FTTH approach a “dead business model walking.” He forecasted a shift in marketing away from an emphasis on the fiber aspect. To that point, Google acquired a relatively small, San Francisco-based service provider called WebPass in October.
Boris Maysel, director of business development for Siklu, said of WebPass, “I’d say that 80%, maybe more, of their network is based on our equipment. The way we position that is fixed wireless access extends fiber. This hybrid fiber/wireless approach is what drives this [fixed wireless]application. The technology is cost-effective enough to serve single-family homes,” whereas FTTH is not. “Fixed wireless access,” he said, “this is something real. This is something our customer are doing. The business case for fixed wireless access will work. The price point, of course, makes the business case work. This technology allows [smaller service providers like WebPass]to challenge the big carriers, the big service providers, with a service, that in some cases, outperforms the service that is delivered by big carriers in a fraction of the time.”
Timing–another major driver of the business case behind 5G fixed wireless access. Phazr CEO Farooq Khan called the speed of deployment “the most important thing. The idea is, of course, there is going to be some cost advantage, but assuming there’s no cost advantage over fiber, the biggest advantage is you’re going to light up these 5G base stations and instantly cover the neighborhoods. Fiber, if you want to bring it to 100% of the population, it might take a century. This is the greatest advantage 5G is going to bring over fiber.”
He continued, stressing that fixed wireless access is ideal when residential density hits around 1,000 households per square mile. “Wireless is a shared resource,” he said. With fiber-to-the-home, “The problem is, you bring it to each home then only 25% of homes sign up for the service. With wireless you are not bringing any wire to the home, so you are never going to invest in customers who are not going to sign up for your service. You will only send the CPE [customer-premises equipment] to a home or a business who signs up for the 5G service.”
Maysel summed up the economics of delivering fixed gigabit service in millimeter wave spectrum. “We have installations of one, two, three miles” of coverage. “This is really the last mile kind of solution. The use case for that is either MDUs or businesses where the business case is pretty obvious. The challenge is when you go and try to target the single-family home markets. The challenge is not to be lower cost or cheaper than fiber, the challenge is to make the business case work from the consumer perspective.”
Wireless 20/20 Principal Analyst Berge Ayvazian pointed to the 5G fixed wireless access testing being conducted by AT&T–more on that later–to illustrate the business advantage of using wireless, rather than fiber, for the last mile. “They’re starting on the towers where they already have their base stations. They want to get the signal as close to the households they’re trying to serve, and as efficiently as possible, without having to deploy a bunch of fiber.”
“The trials we are doing,” Wolter of AT&T said, “is going to help us provide data for that business model to see under what conditions does it make sense to do this. In these areas, let’s consider going out and doing that.” Now, let’s take a closer look at the trial work being conducted by AT&T and Verizon.