WISPAPALOOZA 2022 was held last month in Las Vegas. It is one of two annual conferences held by the Wireless Internet Service Provider Association (WISPA). The other is WISPAmerica, which occurred in March in New Orleans.
I attended both and spoke about the competitive environment facing WISPs at WISPAPALOOZA 2022. Last week, a deck went out to Wave7 Research subscribers detailing the latest about wireless internet competition.
WISPAPALOOZA 2022 was a successful event. There were nearly 2,300 attendees, which rivaled the top attendance ever at a WISPA event. The number of exhibitors was a record, with more than 170 companies exhibiting their wares. I sensed a high level of energy at both WISPA events this year.
Our coverage of fixed wireless competition includes the huge efforts currently seen from T-Mobile and Verizon, but this editorial is focused on the more than 2,800 independent WISPs that are working to provide broadband in rural America. The 2,800 figure is courtesy of the Carmel Group, which covers WISPs closely.
RDOF “mentioned in every other sentence”
The RDOF (Rural Digital Opportunity Fund) is a $20.4 billion FCC program intended to facilitate the buildout of rural broadband. The NTIA also has a BEAD (Broadband Equity, Access, and Deployment Bureau) program, which is expected to provide $42 billion in federal funding to facilitate better broadband access in underserved areas.
Recently, I joked with a fellow telecom analyst that RDOF funding was “mentioned in every other sentence.” This surge of federal funding is having several kinds of impact. Some WISPs are receiving RDOF funding with delight, as they are able to improve their networks and increase their customer counts. Also, federal funding is pushing some WISPs in the direction of choosing fiber more often than in the past. Also, it is not all gravy, as WISPs not getting government funding are in some cases facing new competition. This is good for competition, but for WISPs not getting funding, it could mean increased challenges.
WISPs increasingly rolling out fiber
WISPs increasingly are rolling out fiber and are becoming hybrid carriers. This is partly because of increased government funding, but it is also due to the reality that the business case varies widely, depending on population density, terrain, availability of licensed spectrum, and other factors. There has been some discussion about changing the name of WISPA to reflect the reality that many WISPs also are serving customers with fiber.
My view is that government regulators should not artificially force ISPs to adopt fiber as a one-size-fits-all solution. I think that fiber is the greatest telecom invention ever. However, wireless solutions are getting better and more spectrum is being deployed. We should let the WISPs make their own decisions about which technology to deploy and funding should go to assist any technology – wireless or wireline – that meets the needs of rural Americans.
Recon Analytics recently found that fixed wireless providers have net promoter scores that are unsurpassed by providers of fiber and cable technologies. That says a lot.
Elephants in the room – T-Mobile and Verizon
T-Mobile just announced that it added 578,000 Internet subscribers in 3Q 2022, giving it more than 2.1 million fixed wireless subscribers. During the quarter, Verizon added 363,000 fixed wireless subscribers and now has a total of nearly 1.1 million.
Some WISPs admitted to me that they are concerned about these competitors. Given their size and their thousands of stores, I do see T-Mobile and Verizon as significant headwinds to WISP growth. Some of the WISPs were seeking my analysis of the situation.
However, WISPs have the “homefield advantage.” They know their local markets and have a head start. In some rural areas, T-Mobile and Verizon mid-band coverage may be dicey or absent. Also, WISPs may be able to win customers while at church or on their softball team. The homefield advantage is important.
M&A in the works
I ran into some investors at WISPAPALOOZA 2022 and even chatted with some by phone after the event. My sense is that quite a few attended the conference. There is plenty of room for dealmaking to gain scale, as only one WISP is thought to have coverage of a population of more than 8 million.
There are some recent deals that are cases in point. Everywhere Wireless, an Illinois WISP that is mostly focused on Chicago, in September announced a merger with SilverIP, which is a fiber ISP in Chicago. Altafiber, formerly known as Cincinnati Bell, recently acquired Agile Networks, a large WISP with coverage of much of Ohio. Both of these make my point not only about M&A, but about ISPs using a mix of fixed wireless and fiber to serve their customers.
KwiKom Communications is a rural Kansas WISP that has coverage just south of my home in Kansas. The company has acquired numerous Kansas WISPs. In some markets, KwiKom competes via fiber. It just depends on the local conditions.
Optimism, despite some headwinds
The Carmel Group reported last year that WISPs are growing customers and revenues at a solid double-digit pace. I agree that the growth seems solid. Sure, T-Mobile and Verizon are providing challenges, but WISPs’ tailwinds are even stronger. The pandemic has increased demand for internet broadly and employees in some cases can work from anywhere, maybe from a mountain town in Colorado. Wireless technologies are getting better and more spectrum is coming into play.
Coming out of WISPAPALOOZA 2022, I think four key trends are federal funding, increased competition from T-Mobile and Verizon, the rise of hybrid ISPs (fixed wireless plus fiber), and increased investment and M&A.
Oh, and a piece of advice for WISP employees. Don’t run up the score next time your softball team goes ahead. The people on the other team might be your next customers.
Jeff Moore is Principal of Wave7 Research, a wireless research firm that covers U.S. postpaid, prepaid, and smartphone competition. Jeff has 25 years of telecom industry experience, including 13 years of competitive intelligence work for Sprint. Follow him on Twitter @wave7jeff.
Industry Voices are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by FierceWireless staff. They do not represent the opinions of FierceWireless.