Home internet prices in the U.S. are being driven down by fierce competition between mobile carriers offering Fixed Wireless Access (FWA) and cable internet companies offering legacy Hybrid Fiber Coax connections. The increased competition has driven down the cost of home internet service, a welcome break for consumers when prices are rising for many other essential products. The price of home internet service fell 3.1% in May from a year earlier, while the overall consumer-price index rose 2.4%, according to the Labor Department.

The WSJ reports that major home-internet service providers including Verizon VZ, Comcast/Xfinity and T-Mobile launched a flurry of price-lock guarantees, promising steady rates for as long as five years.  CableCos Charter, which is acquiring Cox, unveiled a three-year deal last year.

Cable companies have struggled to retain broadband internet subscribers since mobile carriers began offering more affordable 5G fixed-wireless access (FWA) internet service in 2018. FWA, which relies on over the air transmission to cell towers instead of HFC access, brought competition into markets where cable companies had long enjoyed being the only game in town. Now both types of providers are growing more aggressive to attract—and keep—customers.

“The cable companies went from gaining subscribers and raising rates every year to declining subscribers and giving people price locks,” said John Hodulik, a UBS analyst. “They’re seeing churn rise in their broadband subscriber base. And they’re trying to nip that in the bud.” Fixed wireless can sometimes cost half as much as a cable-provided internet plan. Though network congestion and other connectivity issues can be an issue for some users, the lower price point has been luring cable customers away.

T-Mobile, Verizon and AT&T added a combined 3.7 million FWA customers in 2024. In sharp contrast, Comcast’s Xfinity and Charter’s Spectrum lost more than 900,000 home internet subscribers.  That’s depicted in this graph:

“Our pricing wasn’t breaking through in the marketplace,” said Steve Croney, chief operating officer for Comcast’s connectivity and platforms business. He said the company’s five-year price lock, introduced in April, competes well against the telecom companies’ offerings.

Frank Boulben, chief revenue officer at Verizon’s consumer group, said his company has been trying to address the “pain points” customers have with cable companies, such as price hikes.  That’s why the telco is emphasizing FWA vs its FiOS fiber to the home based service. Boulben said his company would focus on selling fiber service to customers as it becomes available to them.

Is FWA the ONLY real killer application for 5G?  Even though it was NOT one of the envisioned use cases? Ericsson’s recently released Mobility Report says FWA will account for more than 35% of all new fixed broadband connections, with an expected increase to 350 million by the end of 2030.  The report states that more than half of all network service providers (wireless telcos) who offer FWA now do so with “speed-based monetization benefits enhanced by 5G.”

About 80% of the global network operators sampled by Ericsson currently offer FWA, with the most rapid area of growth among CSPs (communications service providers) offering 5G-enabled speed-based tariff plans. These opportunities are about the ability to offer a range of subscriber packages with different downlink and uplink data options with 5G FWA.  As with fiber deals, “increasing monetization opportunities for CSPs compared to earlier generations of FWA.” 51% of operators with FWA offerings now include these speed-based options, which is up from 40% on the same period in June 2024 and represents a 27.5% increase. The June 2024 number had grown 50% on the June 2023 equivalent.

Source: Ericsson Mobility Report

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“We are at an inflection point, where 5G and the ecosystem are set to unleash a wave of innovation,” said Erik Ekudden, Ericsson Senior Vice President and Chief Technology Officer. “The recent advancements in 5G standalone (SA) networks, coupled with the progress in 5G-enabled devices, have led to an ecosystem poised to unlock transformative opportunities for connected creativity. Service providers have recognized this potential of 5G and are beginning to monetize it through innovative service offerings that extend beyond merely selling data plans. To fully realize the potential of 5G, it is essential to continue deploying 5G SA and to further build out mid-band sites. 5G SA capabilities serve as a catalyst for driving new business growth opportunities.”

Verizon, AT&T and T-Mobile are winning converts to FWA at a faster pace than many anticipated, said Jonathan Chaplin, a managing partner at equity research firm New Street Research. Charter agreed to buy Cox last month for $21.9 billion in equity and assume $12 billion of its outstanding debt, in part to acquire scale to better compete with fixed wireless access.  However, fixed-wireless growth can’t last indefinitely.  The wireless networks on which they run will eventually hit capacity, limiting how many subscribers they can add. Chaplin estimates the networks can support around 19 million total fixed-wireless subscribers—which he predicts they will reach in about five years, accounting for planned network expansions that the companies have announced. When that limit is reached, cable companies may regain the upper hand and keep growing their fiber customer base, Chaplin said.

The big three wireless carriers (AT&T, Verizon and T-Mobile) have all been investing in fiber-based wired networks via build-outs and acquisitions. AT&T is bringing new customers in via FWA, with the long-term goal to convert them to fiber-based service, said Erin Scarborough, who runs that company’s broadband and connectivity initiatives.

References:

https://www.wsj.com/business/telecom/a-fight-between-cable-and-wireless-providers-means-cheaper-home-internet-for-you-b36cc086

https://www.telecoms.com/5g-6g/ericsson-says-fwa-is-boosting-telco-monetization-opportunities

https://www.ericsson.com/en/reports-and-papers/mobility-report

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