As operators like Verizon and T-Mobile prepare to report their first quarter earnings results, analysts are predicting plenty of growth in the fixed wireless access (FWA) sector.
The reason, according to the financial analysts at Cowen, is simple: "These carriers are undeniably swimming in capacity with no data-rich 5G use cases on the horizon."
Meaning, robust 5G networks are available today, but there aren't any data-heavy apps that are chewing through all that capacity. As a result, operators like T-Mobile and Verizon are moving into the FWA business in order to profit from their excess 5G network capacity.
The Cowen analysts predict Verizon, T-Mobile, Starry and other FWA providers will collectively add almost 2.3 million new customers during the course of 2022. And they're predicting that growth will continue in the coming years: They're expecting Verizon to accumulate up to 5 million total FWA customers by 2025, and for T-Mobile to count up to 8 million total FWA customers by that year. Starry, the analysts said, expects around 1.4 million customers by 2026.
The financial analysts at Morgan Stanley Research recently predicted similar growth lines. They expect Verizon and T-Mobile to report a combined 400,000 new FWA customers during the first quarter of 2022, up from the roughly 300,000 they reported in the fourth quarter of last year.
Implications and ramifications
But how exactly is this FWA trend affecting the wider market for broadband Internet services? According to the financial analysts at New Street Research, the growth in FWA will impact the cable industry, but perhaps not as much as some have feared.
FWA "must be taking some subs from cable," they wrote, but added that "it just doesn't seem right" that a major chunk of new FWA customers are fleeing cable broadband services that the analysts admit are superior to FWA.
Instead, the New Street analysts wrote that there are a variety of factors impacting the cable industry. Those factors include a decline in the sale of DSL services, new fiber network buildouts and a slowdown in the number of people moving to new homes. Such moves often generate new broadband customers.
Broadly, the New Street analysts expect a slowdown in the cable industry in 2022, a rise in the sale of FWA services and a slight increase in the number of customers for fiber Internet services.
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