Fixed wireless access (FWA) services are still forecasted to gain traction across Southeast Asia to help bridge the digital divide – but the experience in the Philippines shows that operators shouldn’t take that growth for granted.
New figures from ABI Research say that the FWA market for Southeast Asia as a whole is expected to reach 7.8 million subscriptions by 2028, which works out to a CAGR of 13%. That also translates into US$2.23 billion in FWA service revenues by the end of 2028.
There are numerous factors driving that projected growth, starting with the rise in 5G rollouts and an increased focus on addressing Southeast Asia’s digital divide. However, a key driver is growing demand for broadband connectivity across the region to support the rising necessity of digital connectivity in the region, according to ABI.
That’s why a major chunk of that FWA action is expected to be concentrated in markets like Indonesia, the Philippines, and Malaysia, which have fixed-line broadband penetration rates below 50%. By contrast, there’s less demand for FWA is places like Thailand and Vietnam, which have more widespread fiber availability.
Indonesia and the Philippines are also keen on FWA because both are archipelagos with challenging terrain. Operators like Telkomsel, PLDT/Smart and Globe Telecom have already launched 5G FWA services.
The appeal of 5G FWA as a home broadband alternative has been touted by vendors for years, and isn’t hard to understand. Apart from data speeds being fairly close to FTTH, 5G FWA can be rolled out much faster and more cost-effectively, especially in underserved areas that are hard to reach.
Then why are FWA subs declining in the Philippines?
On the other hand, the obvious selling points of FWA don’t guarantee success. A separate research note from ABI Research last month notes that in the Philippines, FWA subscriber numbers are actually dropping. In its 1Q 2022 financial statement, Globe Telecom reported 2.4 million FWA subscribers – a year later, that number was down to 1.2 million. PLDT/Smart also reported a drop in FWA subscribers for the same period. Notably, both reported an increase in fixed-broadband subscriptions.
Sarah Yong, Southeast Asia digital transformation research analyst at ABI Research, said that there are a couple of potential factors to account for this: operators selling off tower assets (which impacts their ability to offer FWA services), and the fact that fiber rollouts are still ongoing, indicating that operators continue to see FWA as a placeholder until fiber is available.
Yong noted that in June last year, Globe Telecom launched GFiber Prepaid in June 2022, which was part of its strategy to transition out of FWA whislt still addressing the digital divide.
“By offering a service that is prepaid and, therefore, on demand with no lock-in period, it is working to connect the unconnected in an attractive and different way,” Yong wrote.
Yong also notes that the entry of satellite broadband players like Starlink and Astranis into the Philippines ISP sector may also be a factor in FWA’s decline, although it’s a comparatively pricey option for users.
In the Philippines and elsewhere in Southeast Asia, whether FWA ends up being a stopgap for fiber access or a viable broadband alternative may hinge on the progress of 5G rollouts – particularly millimetre-wave 5G, which is the next step for 5G FWA. Telkomsel is planning to roll out 5G mmWave FWA services following tests with Ericsson and Qualcomm earlier this year, and if the rollout is a success, other operators in Southeast Asia could follow their lead, ABI says.
However, adds Jake Saunders, ABI’s VP for Asia Pacific, “It is important to consider other factors such as spectrum availability, regulatory environments, and collaborations between the private and public sector when implementing FWA initiatives.”