The5GFWAopportunity

ATCOmodelfora5GmmWave

FWAnetwork

Copyright?2022–GSMAIntelligence

THE5GFWAOPPORTUNITY:ATCOMODELFORA5GMMWAVEFWANETWORK

Contents

Executivesummary2

1TheTCOmodel5

2Mainresults7

3Sensitivities9

4Conclusion14

THE5GFWAOPPORTUNITY:ATCOMODELFORA5GMMWAVEFWANETWORK

Executive

summary

Aboutthisresearch

Thisisthesecondinaseriesofresearchreportsexaminingtheconditionsunder

which5Gfixedwirelessaccess(FWA)canbeacost-effectivemeanstodeliver

broadbandservices(withdownloadspeedsofatleast100Mbps),comparedto

alternativewirelinetechnologiesandaccordingtodifferentdeploymentstrategies.

Inthefirstreport,weprovidedanoverviewofthespectrumavailable(40MHz)andareasonable

globalfixedbroadbandmarket,thetechnologiesusedamountofmmWavespectruminthe26–28GHz

andrecentdevelopmentsin5GFWAnetworks.Webands(400MHz).Thisisrepresentativeofmany

alsooutlinedthecostdriversofeachtechnology,asoperatorsituationsaroundtheworld,includingin

wellastheuniquetotalcostofownership(TCO)modelcountriessuchasItaly,1Chile2andGermany,3andwill

weusetoinformourfindings.berepresentativeofmoreinthefutureasmmWave

bandscontinuetobeassigned.Thescenarioisrelevant

Inthisreport,wefocusonthescenarioofamobiletomid-bandconstrainedmobileoperatorsthatdo

operatorthathasanexisting5Gnetworkformobilenothaveafixedoffering,ormid-bandconstrained

servicesandislookingtodeployafixedbroadbandconvergedoperatorslookingtocomplementor

offering.Theoperatorhaslimitedsub?6

GHzupgradetheirwirelinenetworksinunderservedareas.

140MHzperoperatorofspectruminthe3.5GHzbandonaverageand200MHzinthe26GHzbandperoperatoronaverageauctionedasofDecember2021.

250MHzofspectruminthe3.5GHzbandperoperatoronaverageand400MHzinthe26GHzbandperoperatoronaverageauctionedasofDecember2021.

375MHzofspectruminthe3.5GHzbandperoperatoronaverageauctionedasDecember2021;mmWavespectruminthe26GHzbandavailablefor5Gservicesuponapplication.

2?Executivesummary

THE5GFWAOPPORTUNITY:ATCOMODELFORA5GMMWAVEFWANETWORK

WeuseouruniqueTCOmodeltoestablishunderwhatbuildingandroaddensity.Sincethehypothetical

conditionsdeploying5GFWAcanbeacost-effectiveoperatorhaslowavailabilityofsub-6GHzspectrum

connectivityoption.Wefocusonthreegeographiesandisconstrainedinmid-bandcapacity,westudy

(Europe,theUSandLatinAmerica)overa10-yeartheeconomicsofadeploymentstrategythatinvolves

periodinthreeareatypes(anurbanarea,suburbanusingmmWavespectrumtoprovidethecoverageand

areaandruraltown),whichareconstructedusingcapacityrequiredfor5GFWAservices.Werefertothis

real-worlddataonsurfaceareaandpopulation,anddeploymentasa5GmmWaveFWAnetwork.

Keyfindings

MobileoperatorsinEurope,theUSandLatinAmericaunderservedareas.5GFWA’sfastertimetomarket

thatareconstrainedintheirmid-bandholdingsandmeansoperatorscandeployimprovedbroadband

lookingtodeployFWAservicescanconsidera5Gservicesinunderservedareasbeforethearrivalof

mmWaveFWAnetworkacost-efficientalternativetoFTTH,appealingtopotentialsubscriberseagerfor

fibretothehome(FTTH)inseveralinstances:improvementsinnetworkperformance.5GFWA

isalsoanagilesolution;mobileoperatorswithan

?Inruraltowns,a5GmmWaveFWAnetworkisexistinginfrastructurebasecanscale5GFWAservices

themostcost-effectivesolutionfordeliveringaccordingtodatatrafficgrowth,byaddingbandwidth

future-proof,next-generationbroadbandservicesandequipmenttoexistinginfrastructure.

wherefibrecablescannotbedeployedusing

existinginfrastructurethatcanberentedorshared.Thebaselinescenarioisbasedonthemostcommon

Accordingtobaselineassumptions,a5GmmWavenetworkconfigurationinthemarkettoday,with

FWAnetworkcoulddelivercostsavingsofupto55%mmWavetransmittersconnectingwithsubscribers

inEurope,45%intheUSand65%inLatinAmerica.equippedwithstandard,indoor,self-mountedCPE.

Wehaveexaminedwhetheralternativesolutionssuch

?5GmmWaveFWAcanalsobeacost-efficient

asrooftop-mountedantennasornewtechnology

connectivityoptioninsuburbanareaslackingducts

trendssuchashigh-power,indoor,self-mounted

orpolesthatcanberentedorshared.Inthiscase,

CPEsolutionscouldimprovethecostsavingsfor5G

accordingtobaselineassumptions,costsavings

mmWaveFWAversusFTTH.Theformer,depending

couldamountto30%inEuropeandtheUS,and

onthepropagationcharacteristicsoftheareaand

45%inLatinAmerica.

precisesitelocations,canimprovecoverageand

?Insomeurbanareas,5GmmWaveFWAcanbeperformancebutrequiresatruckroll.Thelatterdoes

cost-effectivecomparedtoFTTHwherenewductsnotrequireatruckrollandhasshownpromising

needtobebuilttodeployfibrecables.AccordingresultsinboostingmmWavecoverage.

tobaselineassumptions,5GFWAcoulddelivercost

savingsof25%inLatinAmericaandwouldcostas?Weestimatethatfor5GmmWaveFWA

muchasFTTHinEuropeandtheUS.deploymentsinurbanandsuburbanareasin

Europe,theUSandLatinAmerica,high-power,

?FTTHwouldbeacost-effectiveoptionversus5G

indoorCPEsolutionscouldprovidebenefitsover

mmWaveFWAwherefibrecablescanbedeployed

standardindoorCPE,boostingcost-effectiveness

inaerialorundergroundinfrastructurethatcanbe

of5GmmWaveFWAversusFTTHby10to20

sharedorrented.

percentagepoints.

Animportantfactorcostmodelsdonotgenerally

?Weestimatethatahybridapproachthatinvolves

captureistheopportunitycostofthelongertimeto

providingsubscriberslocatedfarawayfrom

marketassociatedwithFTTHdeployments.Operators

basestationswithoutdoorantennas,andthe

shouldconsiderthiswhenweighingupthedifferent

remainderwithindoorCPE,canimprovethe

deploymentstrategies.Theyshouldalsoconsider

cost?effectivenessof5GmmWaveFWAby

thefirst-moveradvantagethatariseswhenfaster

between10and15percentagepoints.

broadbandoptionsinitiallybecomeavailablein

3?Executivesummary

THE5GFWAOPPORTUNITY:ATCOMODELFORA5GMMWAVEFWANETWORK

Figure1

Netpresentvalue(NPV)of5GmmWaveFWATCOasapercentageofNPV

ofFTTHTCO,accordingtobaselineassumptions–high-powerindoorCPE

versusstandardindoorCPE

140%

120%

5GmmWaveFWAnotcost-eective

FTTHTCO

100%

5GmmWaveFWAcost-eective

80%

60%

40%

20%

0%

UrbanSuburbanRuralUrbanSuburbanRuralUrbanSuburbanRural

EUROPEUSLATINAMERICA

Ducted–owned:standardCPEDucted–owned:high-powerCPE(potential)

Aerial–owned:standardCPEAerial–owned:high-powerCPE(potential)

Mainassumptions:400MHzinthe26–28GHzband,40MHzinthe3.5GHzband,30%marketshare,10%busyhourshareoftraffic,85%DLshareoftotalresidentialtraffic,indoor

self-mountedCPE,1:32fibrecablessplitratio.

Source:GSMAIntelligenceanalysis

Ofcourse,thereareotherstrategiesavailabletooperatorswithdifferentspectrumportfolios.Theseareexplored

inthenextreportinthisseries.

4?Executivesummary

THE5GFWAOPPORTUNITY:ATCOMODELFORA5GMMWAVEFWANETWORK

1?

TheTCO

model

Inourmodel,wecomparetheTCOof5GFWAwiththecostofdeployingthree

wirelinetechnologiesthatinvolveopticalfibreinfrastructurebutdifferatthelast

mileoftheaccessnetwork:fullfibre(FTTH),copper-basedG.fast,andhybridfibre-

coaxial(HFC).

Weassumethatthe5GFWAnetworkwouldbedeployedusingexisting5G

infrastructure.Sinceourhypotheticaloperatorhaslimitedsub-6GHzspectrum

available,the5GFWAnetworkwouldprimarilybeenabledbymmWavespectrum,

exceptforalimitedshareofpremisesthatwouldnotreceiveasufficientmmWave

signalbecauseofthedeploymentconstraintsassociatedwithleveragingexisting

sitelocationsandthedifferentpropagationcharacteristicsofthesebands.4

4WeareawarethatnewmmWaverepeatersolutionscouldboostmmWavecoverage,reducingcoveragegapsinthenetwork.

5?TheTCOmodel

THE5GFWAOPPORTUNITY:ATCOMODELFORA5GMMWAVEFWANETWORK

WeestimatetheTCOofeachwirelinetechnologyThechoiceofdeploymentmodedependsonfactors

accordingtodifferentdeploymentmodes(inorderspecifictoeachlocalarea.Ductsorpolesthatcanbe

of

increasingcost):sharedorrentedmaynotbeavailable,particularly

inruralareasandsomesuburbanareas.Certain

?ducted–rented:fibreandcoaxialcablesare

terraincanmakethecostsoftrenchingprohibitive,

deployedundergroundinexistingductsrented

whileovergrounddeploymentislessreliablethan

fromautilityproviderorlocalauthority

undergrounddeploymentsinceitexposescablesto

?aerial–rented:fibreandcoaxialcablesareexternalforces;areasthatarepronetoharshclimate

deployedovergroundusingexistingpolesrentedeventsarenotwellsuitedtothistypeofdeployment.

fromautilityproviderorlocalauthorityFinally,operatorsareusuallyconstrainedintheir

deploymentchoicebylocalauthorities,whogenerally

?aerial–owned:fibreandcoaxialcablesare

preferonedeploymenttypeoveranother.

deployedoverground,withthepolesbuiltbythe

operator

?ducted–owned:fibreandcoaxialcablesare

deployedundergroundinducts,withtheducts

deployedandownedbytheoperator.

6?TheTCOmodel

THE5GFWAOPPORTUNITY:ATCOMODELFORA5GMMWAVEFWANETWORK

2?

Mainresults

Accordingtoourbaselinecase,wefindthatG.fastandHFChaveaTCOthatis

similartoorhigherthanthatofFTTH.Wethereforefocusourcomparisonon

FTTHversus5GFWA.

ManyruraltownsdonotprovidesufficientbusinessSuburbanareasvarysignificantlyintermsof

rationaleforFTTHdeployment,duetolowpopulationbroadbandavailability.Somesuburbsarewellserved

densityand,insomeareas,dispersedhousing.byFTTHorDOCSIS,whileothersareunderserved

Moreover,ductsorpolesthatcanbesharedorrentedwithlegacytechnologiessuchasADSL.Wefindthat

arenotgenerallyavailable,sooperatorsneedtoinsuburbanareaswhereoperatorsneedtotrench

buildtheminthefirstplace.Thesefactors,alongwithandbuildducts,5GmmWaveFWAisacost-effective

theassociatedneedtoobtainpermissions,increasesolutionevenwhentheoperatorhasahighmarket

thecostperhomepassedandthetimetomarketshareandhighbusyhourshare.5Insomeinstances,

ofwirelinetechnologies.Wirelesstechnologies,a5GmmWaveFWAnetworkwillalsodelivercost

meanwhile,arewellsuitedtoruraltownssincetheysavingsundertheaerialdeploymentmode.However,

removetheneedforcapital-intensiveinfrastructurewherefibrecablescanbedeployedusingexisting

works.Inruraltowns,wefindthata5GmmWaveductsorpolesthatcanberentedorshared,5G

FWAnetworkisthemostcost-effectivesolutionformmWaveFWAisonlyacost-effectivealternativeifthe

deliveringdownloadspeedsofatleast100MbpsifFWAoperatorfacesrelativelylowpeakhourtrafficand

therearenoexistingductsorpolesthatcanbesharedmarketshare.

orrented.

5Trafficinthepeakhourasapercentageoftotaldailytraffic.

7?Mainresults

THE5GFWAOPPORTUNITY:ATCOMODELFORA5GMMWAVEFWANETWORK

Inurbanareas,highpopulationdensityandtheMobileinfrastructureisgenerallydenseincities,so

availabilityofexistinginfrastructuremakeFTTHtheoperatorswithanexisting5Gofferingformobile

mainconnectivitysolution,particularlyindevelopedservicescanreusesitelocationsformmWave

countries.Undergrounddeploymentisgenerallyequipmenttargetingneighbourhoodsthatdonot

adoptedincitiesinEuropeandtheUS,whileinhaveFTTHaccess.InurbanareasinEurope,theUS

someLatinAmericancitiesaerialsolutionscanalsoandLatinAmerica,wefindthata5GmmWaveFWA

beanoption.Insomecities,localauthoritiesandnetworkwouldbecost-effectivecomparedtoFTTH

nationalregulatorsencouragefibredeploymentsbyundertheducteddeploymentmodeatsizeablelevels

makingavailableexistingductsorfacilitatingsharingofmarketshare,andundertheaerialdeploymentmode

agreements.Inothercities,regulatoryredtapeand/atmoderatelevelsofmarketshare.WhereFTTHcan

ordifficultterraincaninflatethecostofdeployingfibrebedeployedinductsoronpolesthatcanberentedor

andresultinsizeabletime-to-marketdelays.shared,a5GmmWaveFWAnetworkwouldbecost-

effectiveonlyatrelativelylowlevelsofmarketshare.

8?Mainresults

THE5GFWAOPPORTUNITY:ATCOMODELFORA5GMMWAVEFWANETWORK

3?

Sensitivities

Inourmodel,theprecisevalueofcostsavingsthatcanbedeliveredbya5GFWA

networkdependsonseveralfactors,includingtraffic,civilworksandCPEchoice.

Traffic

FTTHcangenerallysupportmoretrafficthan5GFWA,residentialcustomers.Assumingdataconsumption

making5GFWAlesscost-effectivecomparedtoFTTHpersubscribergrowsaccordingtopastgrowthrates,

forthehighesttrafficdemandscenarios.Fora5Gthehigherthebusyhourshareoftrafficandoperator

mmWaveFWAnetwork,theimpactofhigherlevelsmarketshare,thelowerthe5GFWAcostsavings,

oftrafficdemandoncostsavingsismainlydrivenbyasmorebasestationswouldneedtobedeployedto

ourassumptionthataproportionofpremiseswouldsupporthighertrafficlevels.

notreceiveagoodmmWavesignalandsowould

beservedbymid-bandspectrum.TrafficdemandisGiventherelativelyhighertrafficdemandinurban

drivenbydataconsumption,thebusyhourshareofareascomparedtosuburbanareasandinsuburban

trafficandoperatormarketshare.Inourbaselinecase,areascomparedtoruraltowns,theimpactofhigher

weassumethatdataconsumptioncontinuestogrowtrafficdemandislowestinruraltownsandgreatest

accordingtopastgrowthrates;wesetatargetmarketinurbanareas.Inthelatter,weestimatethatadding

shareattheendoftheperiodat30%;andweassumemoremmWavebandwidth(e.g.800MHz)would

thatthebusyhourshareoftrafficstandsat10%forimprove5GmmWaveFWAcostsavingscomparedto

9?Sensitivities

THE5GFWAOPPORTUNITY:ATCOMODELFORA5GMMWAVEFWANETWORK

FTTHwhentrafficdemandisveryhigh.Forinstance,standsat10%orbelow.Inurbanareas,itiscost-

for50%marketshareand20%busyhourshareineffectivewhere,forinstance,busyhourshare

urbanareasintheUSandEurope,the5GmmWavestandsat10%andmarketshareislessthan30%in

FWATCOwouldimproveby7and5percentagepointsEuropeandtheUS,and50%inLatinAmerica.

respectivelyversustheTCOforFTTH.

?Assumingfibrecablesaredeployedoverground

onpolesbuiltbytheoperator,a5GmmWaveFWA

Whileourhypotheticalareashavedifferent

networkwouldbecost-effectiveinruraltowns

characteristicssoarenotdirectlycomparable,

assuming10%busyhourshareatmarketshares

weestimatethataveragedataconsumptionper

below30%inEuropeandtheUS.Insuburban

subscriberishighestintheUSandlowestinLatin

areas,itwouldbecost-effectiveatmarketshares

America.Thisisanimportantfactordrivingthe

below20%inEuropeandtheUS,andlessthan

differencesintheresultsbyregionbelow.

50%inLatinAmerica.Inurbanareas,itwould

becost-effectiveatmarketsharesbelow10%in

Table1showsthelevelsofmarketshareandbusyhour

Europe,20%intheUSand30%inLatinAmerica.

sharewherea5GmmWaveFWAnetworkwouldbe

cost-effectiveinaruraltown,urbanareaandsuburban?Iffibrecablescanbedeployedusingexistingducts

areainEurope,theUSandLatinAmerica:orpolesthatcanbesharedorrented,5GmmWave

FWAwouldbecost-effectiveatrelativelylow

?Wherefibrecablesneedtobedeployedlevelsofmarketshareandbusyhoursharein

undergroundinductsortrenchesbuiltbytheurbanandsuburbanareas,andwouldnotbea

operator,a5GmmWaveFWAnetworkisgenerallycost-effectivesolutionatanylevelofmarketshare

cost-effectiveinruraltownsathighlevelsofbusyandbusyhourshareinruraltowns.However,

hourshareoftrafficandmarketshare.Insuburbanexistingductsorpolesthatcanberentedor

areas,itisgenerallycost-effectiveat50%marketsharedtodeployanaccessnetworkwithinrural

shareorbelowwhenthebusyhourshareoftraffictownsarenotgenerallyavailable.

10?

Sensitivitie

THE5GFWAOPPORTUNITY:ATCOMODELFORA5GMMWAVEFWANETWORK

Table1

5GmmWaveFWATCOversusFTTHTCObymarketshare,busyhourshareof

trafficanddeploymentmode

RURALTOWNSUBURBANAREAURBANAREA

OwnedcivilRentedorsharedOwnedcivilRentedorsharedOwnedcivilRentedorshared

Busy

infrastructurecivilinfrastructureinfrastructurecivilinfrastructureinfrastructurecivilinfrastructure

Markethour

shareshareDuctedAerialDuctedAerialDuctedAerialDuctedAerialDuctedAerialDuctedAerial

10%

Europe10%15%

20%

10%

20%15%

20%

10%

30%15%

20%

10%

40%15%

20%

10%

50%15%

20%

10%

US10%15%

20%

10%

20%15%

20%

10%

30%15%

20%

10%

40%15%

20%

10%

50%15%

20%

10%

Latin10%15%

America20%

10%

20%15%

20%

10%

30%15%

20%

10%

40%15%

20%

10%

50%15%

20%

5GFWAcost-effective?5GFWApotentiallycost-effectivewithhigh-powerCPE?FTTHcost-effective

Mainassumptions:400MHzinthe26–28GHzband,40MHzinthe3.5GHzband,85%DLshareoftotalresidentialtraffic,indoorself-mountedCPE,1:32fibrecablessplitratio.

Source:GSMAIntelligence

11?

Sensitivitie

THE5GFWAOPPORTUNITY:ATCOMODELFORA5GMMWAVEFWANETWORK

Civilworks

OurresearchhighlightsconsiderablevariationintheCivilworkscostscanbemuchhigherinurbanand

costsincurredindeployingcivilinfrastructure(ductssuburbanareassufferingfromdifficultterrainand/

orpoles)tosupportFTTHnetworks.Asidefromorregulatoryredtape.Insuchcases,5GFWAcanbe

whethertheinfrastructurecanbesharedorrented,evenmorecost-effective.Assumingthatcivilworks

variationisdrivenbyfactorssuchasthecharacteristicscapexisabove$70,000,$100,000and$50,000

oftheterrain(e.g.rockyversussandy,flatversusperkilometreinEurope,theUSandLatinAmerica

uneven),thecostofobtaininglocalpermits,thecostofrespectively,5GmmWaveFWAwouldbecost-

labourinthearea,andthechoiceofductsize.Wehaveeffectiveatmarketsharesbelow30%inurbanareas

lookedatdifferentvaluesofthesecoststounderstandandbelow50%insuburbanareas.

underwhatconditionsa5GFWAdeploymentwould

becost-effective.Figure2presentsthe5GmmWaveFWAcostsavings

accordingtodifferentvaluesofcivilworkscapexand

Weestimatethata5GmmWaveFWAnetworkwouldmarketshareinasuburbanareainEurope.Whilethe

becost-effectivewherecivilworkscapexisaboverelativechangesaredifferentforruraltowns,suburban

$35,000,$50,000and$25,000perkilometreinareasandurbanareasintheUSandLatinAmerica,

Europe,theUSandLatinAmericarespectively,andandfortheurbanareaandruraltowninEurope,civil

marketshareisbelow50%inruraltowns,30%inworkscapexandmarketsharehaveasimilarimpactin

suburbanareasand15%inurbanareas.theseareas.

Figure2

5GmmWaveFWAcostsavingsaccordingtodifferentvaluesofcivilworks

capexandmarketshare,forasuburbanareainEurope

Civilworkscapex(US$thousandsperkilometre)

101520253035404550556065707580

5%

6%

7%

8%

9%

10%

11%

12%

13%

14%

15%

16%

17%

18%

19%

20%

21%Upto60%costsavings

22%

23%

24%

25%

26%

27%

28%

29%

30%

31%

32%

33%

Marketsharein2031(%)shareMarket

34%

35%

36%

37%

38%Negativeornocostsavings

39%

40%

41%

42%

43%

44%

45%

46%

47%

48%

49%

50%

Mainassumptions:400MHzinthe26–28GHzband,40MHzinthe3.5GHzband,10%busyhourshareoftraffic,85%DLshareoftotalresidentialtraffic,standardindoorself-

mountedCPE,1:32fibrecablessplitratio.

Note:Civilworksopexisreducedproportionallytothepercentagereductioninbaselinecivilworkscapex.

Source:GSMAIntelligenceanalysis

12?

Sensitivitie

THE5GFWAOPPORTUNITY:ATCOMODELFORA5GMMWAVEFWANETWORK

CPEandperformancerequirements

Inourbaselinecase,weassumesubscriberswouldincreasesbybetween10and15percentagepoints

beequippedwithindoor,self-mounted5GFWAdependingontheregionandtheareatype.

CPE.However,therearealternativesolutions,such

asoutdoor,rooftop-mountedantennasandnewHigh-power,indoor,self-mountedCPEdoesnot

technologytrendssuchashigh-power,indoor,self-requireatruckrollandhasshownpromisingresultsin

mountedCPEthatoperat