U.S. Cellular has high hopes for fixed wireless using mmWave 5G
U.S. Cellular said it would begin testing a fixed wireless Internet service on its forthcoming millimeter wave (mmWave) 5G network in 2021.
Such an action represents a doubling down on fixed wireless, considering U.S. Cellular already has commercial fixed wireless offerings on its 4G LTE network.
"We think there is a significant opportunity there and you can expect to see that portion of the business continue to grow," Laurent Therivel said about fixed wireless access, during his company's earnings call, according to a Seeking Alpha transcript. Therivel took over from retiring CEO Ken Meyers in July.
Therivel explained that 5G initially will provide U.S. Cellular the ability to sell high-speed Internet and fixed wireless broadband and, in the future, wil l enable fancy offerings like autonomous cars, connected health and connected education.
Fixed wireless benefits
On fixed wireless specifically, Therivel explained that "it's a great way to monetize excess capacity. And so, where you have excess capacity on the LTE side, which is what we're monetizing today, we're seeing good revenue opportunities and there – and we're able to help customers and get customers connected in areas where maybe cable either doesn't address or has very limited presence."
He added that the offering is also helping U.S. Cellular gain phone customers as they increasingly buy both products together. "It's an attractive opportunity not just to grow that product line, but you're growing the business with it too," Therivel noted.
The company reported the addition of 12,000 postpaid phone customers during its most recent quarter, a development that, in part, led the Wall Street analysts at Raymond James to raise their stock price target on the company.
However, Therivel declined to provide details on U.S. Cellular's 5G fixed wireless plans in terms of the number of households it will cover and the speeds it will provide. U.S. Cellular acquired roughly $402 million worth of mmWave spectrum licenses across three recent FCC spectrum auctions.
U.S. Cellular today provides 25GB of high-speed fixed wireless data for $50 per month via its LTE network; after customers reach that allotment, their speeds are slowed to 2G speeds. The company doesn't provide any firm speed promises because the company said speeds "vary due to area, coverage, foliage, compression or the network management requirements."
Combating mmWave fixed wireless criticism
U.S. Cellular's plan to embrace fixed wireless on mmWave 5G is notable considering so far Verizon is the only US operator with significant plans to deploy fixed wireless services on mmWave spectrum. Although T-Mobile and AT&T both offer fixed wireless services, neither have explicit plans to do so on mmWave spectrum.
Further, Verizon's own mmWave fixed wireless plans have fallen under criticism. For example, after evaluating Verizon's mmWave network in Sacramento, California, the Wall Street analysts at MoffettNathanson in 2019 wrote that "earning an attractive return will be challenging, at best." However, the analysts subsequently warned cable operators over "creeping complacency" about the threat posed by fixed wireless offerings.
Most such criticism involves the relatively diminutive propagation characteristics of transmissions in mmWave spectrum compared with other spectrum bands.
Verizon has held off on a major fixed wireless buildout on its mmWave spectrum until it obtains more powerful chips from Qualcomm, which it expects in the second half of this year. In the meantime, the operator has begun offering fixed wireless services on its LTE network.
Verizon ultimately plans to cover roughly 30 million households with its mmWave fixed wireless offering or roughly 23% of the country.
U.S. Cellular and Verizon aren't the only operators investing in fixed wireless technology. CenturyLink, Shentel, Windstream, C Spire, Cable One and Midco, among others, also have plans to offer fixed wireless across a variety of spectrum bands, including potentially mmWave bands.