Fixed wireless broadband opportunity a convenient alternative for more Australians.

Fixed wireless broadband access (FWA) has emerged as a viable alternative for customers who don’t want the trouble or expense of a standard nbn connection. This is an opportunity for resellers who want to reach more customers.

Increasing competition and choice in the broadband market

HWBB Fixed wireless broadband enables people to access the internet from their home or workplace using the 4G and 5G networks, also used for high-speed mobile data. As the diagram below shows, data is carried from the broadband provider to the customer’s house wirelessly across the mobile network. This allows users to bypass the nbn completely.

Instead of connecting to a mobile phone, the wireless signal is received by a dedicated broadband modem. Users within the home or business then connect to this modem in a similar way to any other broadband modem, such as by using a Wi-Fi or an Ethernet connection.

In FWA is growing in popularity, aided by the launch of 5G services. Ericsson estimates that in 2022, there were over 100 million FWA services in operation around the world, a number expected to grow to around 300 million by the end of 2028.  

In Australia, the nbn uses FWA in rural areas where cabling is too expensive.

But Australia’s mobile operators are also offering this service on their own networks, in urban areas as well. The ACCC reports there were over 400,000 home wireless broadband services supplied by mobile operators at the end of 2022, around 5% of the broadband market. This number is rising fast.  We aren’t claiming that FWA will replace the nbn, but FWA is appealing to household customers who are driven by convenience and value.

A recent survey of broadband users by Venture Insights (June 2023) showed that half of FWA customers had chosen the service because it was easier to install and move. FWA is easy to install. A wireless modem that can be set up by the customer, usually without needing a technician. Moving home is also simple. The customer just needs to confirm they have coverage at their new home and update their details with their mobile provider. The modem can then be relocated by the customer on their moving day. 

Venture Insights also found that over a third of non-nbn wireless users chose their service because it was cheaper than fixed line alternatives. A review of major broadband providers conducted by Venture Insights in June 2023 found the retail prices of home wireless plans were between five and forty dollars per month cheaper than the nearest equivalent nbn plans offered by the same retailer.

The opportunity for service providers 

Since Optus already allows selected wholesale customers to resell their FWA service. These resellers are targeting a growing market. There is strong growth in net overseas migration as overseas students, skilled migrants and working holiday makers return to Australia. Migration will account for approximately two thirds of Australia’s population growth over the next five years, a period which is forecast to see Australia’s population grow by over 2 million people.[1] This rapidly growing population is a significant opportunity for both mobile and FWA providers.

In addition to this opportunity, over a million households move home each year.[2] Each time they do, they need to cancel their nbn service and buy a new one for their new residence. Moving home can be a trigger for people to re-evaluate their internet services, and look for an opportunity to avoid the hassle of disconnection and reconnection of nbn. This represents a key market that can be targeted by FWA providers.

People under thirty-five years old move home the most frequently, with over 80% having moved at least once in the past five years and over a third having moved three or more times. People renting their place of residence are also more frequent movers than those that own their own home.[3]

Finally, value-seekers are likely to find FWA attractive. FWA prices are highly competitive with nbn and offer an economical alternative where mobile coverage is available.  

Wireless broadband will play an important role in Australia’s broadband future

FWA has an important role to play in Australia’s broadband future. Wholesale FWA as offered by Optus provides retail service providers with another way to deliver broadband to their customers, while reducing their reliance on nbn.

Venture Insights expects fixed wireless services to increase their share of the broadband market, and potentially double the number of services within the next five years.[1] Wholesale access to FWA represents a significant opportunity to gain new customers or potentially optimise margins by targeting selected nbn services for migration to FWA.

Source:
[1].  Venture Insights, ‘State of the Australian Telecommunications Industry: Building a stronger industry for Australia’s future’, 13/6/23

[2] . Australian Bureau of Statistics, ‘Housing Mobility and Conditions – 2019/20’, 22/7/22

[3] . Australian Bureau of Statistics, ‘Housing Mobility and Conditions – 2019/20’, 22/7/22

[4] . Venture Insights, ‘Australia Consumer Telco Market Outlook’, 8/12/22