Fixed wireless access (FWA) is a bright spot for UScellular’s wireless business. Speaking at the Raymond James Technology Investors conference this week, UScellular CEO LT Therivel said that the company’s FWA subscriber base is doubling every 18 months. “I don’t see that rate of growth slowing,” he said, noting that the majority of UScellular’s FWA customers are using the lower speed service that runs on its LTE network.
UScellular plans to expand its FWA offering in late 2023 and early 2024 using its mid-band spectrum, which means customers will get download speeds closer to 300 Mbps, and Therivel expects that the higher speed FWA service will be an even bigger draw. UScellular secured mid-band spectrum licenses in both the C-band and the 3.45 GHz spectrum auctions.
BEAD funding for towers
Like many broadband providers, the company plans to draw on various government funding programs to help it expand its FWA footprint, including the NTIA’s Broadband Equity, Access and Deployment (BEAD) program. But UScellular is in a bit of a unique situation because it owns a portfolio of 4,000 towers (the big three operators sold their towers years ago). Because of this, UScellular wants to use the government’s broadband funding to build more towers so it can serve more FWA customers and increase its 5G mobile coverage too.
Therival said that currently UScellular needs to be have a certain number of potential customers within a seven-mile radius of a tower to justify the expense of building and operating a tower. However, with government funding it could lower that threshold and build a new tower where there are fewer customers and still achieve a return on its investment.
Therivel said that not only will additional towers help deliver FWA to more customers, but those towers could also be used to expand the company’s 5G mobile footprint and be marketed to other operators to help them expand their wireless coverage in rural ares. “It’s a three for one revenue opportunity,” Therivel said.
Where are the 5G use cases?
However, when asked about UScellular’s mobile business, which in Q3 reported a net loss of 31,000 postpaid customers, including 22,000 postpaid phone subscribers, Therivel said the company is using promotional offers to try to get customers on contracts and upgrade their plans.
Interestingly, he said that while the company is seeing some competition from cable MVNOs that are offering cheaper rate plans, he believes this is only a temporary phenomenon and that eventually the cable MVNOs will experience churn, particularly when customers want to upgrade their devices because the cable companies don’t offer device promotions.
Therival also said what few wireless operator CEOs have publicly admitted. He said that while the industry has invested capital in 5G, the use cases have not materialized yet and that is why operators have excess capacity and can strike so many MVNO deals.