The Growing 5G FWA Enterprise Opportunity

By Larbi Belkhit | 3Q 2024 | IN-7419

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Fixed Wireless Access (FWA) has primarily been discussed as a solution targeting the consumer market. This market has become quite saturated and challenging for Customer Premises Equipment (CPE) vendors, primarily due to a "race to the bottom" for Average Selling Prices (ASPs) in regions such as Asia-Pacific. However, there have been more and more discussions and announcements touting FWA as a great option for the enterprise market, specifically for Small and Medium Businesses (SMBs). SMBs generally use less data than consumers, yet are typically willing to pay more, making it a significant growth opportunity to further monetize the 5G network.

U.S. service providers have placed a greater emphasis on expanding their enterprise FWA offerings. AT&T is a late entrant to the FWA game and introduced Internet Air™ for Business in March 2024. Initially, it primarily served customers with Askey-supplied 5G CPE, but since then, has announced it is now offering Cisco Meraki's newest cloud-managed gateways, the MG52 and MG52E, in June 2024. AT&T added 110,000 FWA connections in 1Q 2024, totaling 200,000 since the launch in August 2023. T-Mobile US is leading the way in terms of total connections, adding another 405,000 in 1Q 2024, totaling over 5.2 million. It recently added Cradlepoint to bolster its Connected Workplace offerings, with its latest X10 Router and E300 Router, the latter of which is targeted at mid-sized organizations, and also give access to its NetCloud Manager.

Enterprises typically have more specific requirements for FWA devices than consumers, who mostly care about price and performance. On the low-end, it is possible to supply such CPE; however, they are primarily for backup and load balancing purposes. To be a primary connectivity solution requires more high-end CPE that meet requirements such as those outlined below:

• Enterprises need CPE devices to be durable and scalable. Scaling using Passive Optical Network (PON) CPE can be challenging and costly as it may need physical upgrades to the network. FWA is much easier to scale, but the CPE must be more robust than consumer-grade devices to provide a longer life span.
• Advanced network management tools are needed for SMBs to monitor, manage, and troubleshoot network issues. Solutions such as Cradlepoint's NetCloud Manager and Cisco's Meraki Platform help manage the deployment, configuration, and security of each device as a service to reduce a customer's Information Technology (IT) burden.
• Enterprises also require enhanced security features to protect their data, prevent cyberattacks, and even support remote and distributed workforces. This means that CPE security features must be regularly updated, as well as enterprise CPE solutions (especially mid-to-high end devices), offering Software-Defined Wide Area Network (SD-WAN) technology to help address these concerns.

The enterprise market, while smaller than the consumer market, is seeing significant growth for U.S. service providers, for example, with enterprise connections accounting for almost 40% of Verizon's total FWA connections by the end of 1Q 2024. Interestingly, net additions to consumer FWA connections for Verizon are beginning to stabilize, hovering around the 230,000 to 260,000 range, while its enterprise connections continue to grow at a slightly higher Compound Annual Growth Rate (CAGR). Outside of the United States, India's Reliance Jio is committed to achieving 100 million connections via FWA for both the residential and SMB market and is currently rolling out its AirFiber service with Millimeter Wave (mmWave) FWA. This all suggests that the enterprise market is a great opportunity for CPE vendors to strengthen their position in the FWA market, and that it is also big enough for them to do so.

However, vendors that are a part of the Wireless Wide-Area Network (WWAN) and Wireless Local-Area Network (WLAN) markets have strong existing relationships with service providers and are likely to also be selected as part of their enterprise FWA offerings. Below, ABI Research identifies some strategies FWA CPE vendors can adopt to ensure that they are able to capitalize on the growing enterprise market:

• Diversify Product Portfolio: Offering an entry-level, mid-range, and high-range enterprise CPE solution will allow vendors to meet the diverse SMB needs, ranging from basic connectivity to advanced networking solutions. This will also allow vendors to have a better opportunity of one of their products being selected as part of a service providers enterprise offerings, as they typically have a multi-vendor portfolio, and ensures the vendor is able to cater to a wide range of requirements, which enhances their market competitiveness.
• Emphasize Security Features: Integrating technologies such as SD-WAN into FWA CPE will enable offering advanced features such as firewalls and centralized security policies to clients. These security features, which will likely be offered with mid-range to high-range CPE, will help SMBs scale quickly while maintaining their security. Regular updates to such features are critical, so adopting best practices from leading WWAN vendors will be valuable to FWA vendors to help them stay competitive as WWAN vendors expand their presence into this market.
• Leverage Cloud Integration: Developing cloud-managed FWA solutions that simplify administration for IT teams by enabling a centralized network management and monitoring experience will be key to offering an attractive solution as an alternative to other connectivity solutions. Features such as automated updates, real-time analytics, and enhanced security protocols help SMBs efficiently scale their network infrastructure, while also optimizing performance.
• PON Convergence: CPE vendors that are familiar with the PON and FWA markets should work on developing high-end hybrid solutions that offer 5G connectivity as a backup to fiber inside a singular device. This is a particularly attractive solution for enterprises, as it allows them to scale using 5G broadband, while also having the option of upgrading to fiber connectivity, and using 5G Reduced Capability (RedCap) chipsets can help keep the cost of such CPE down, given that the cellular connection is a backup and unlikely to be needed frequently.