How LatAm telcos want to reduce fixed wireless costs

Latin American telecoms industry representatives and authorities are mulling the use of universal connectivity funds to help reduce the cost of customer premise equipment (CPE), seen as key to expanding technologies like fixed wireless access (FWA).

In Brazil, regulator Anatel and the industry, trade and development ministry (MDIC) are discussing using these resources to incentivize the development of cheaper residential FWA products, or CPE.

"Last week we had a first meeting and we're working on a cooperation agreement with MDIC. One of the specific objectives is reducing the cost of CPE," Anatel's executive superintendent, Abraão Balbino, told the Futurecom online event.

Balbino also invited network providers and equipment manufacturers to comment on the proposal.

The communications ministry is also part of the Anatel-MDIC talks, a ministerial source, told BNamericas on condition of anonymity.

5G FWA involves using 5G as a last-mile fiber connection and has been touted as a viable option, especially in areas where passing premises with fiber is difficult. However, the option is limited due to high CPE costs.

CPE

Customer premise equipment captures and distributes the 5G signal inside rooms, enabling faster and more reliable connections than Wi-Fi.

Although marketed by network providers such as Huawei and Ericsson as an option to cushion high fiber deployment costs and complexities, FWA architecture is hampered by CPE prices, as the equipment is not produced at scale.

Jacqueline Lopes, director of institutional relations at Ericsson Latin America South, said regional universal services funds should be considered to improve connectivity in schools using FWA.

“One possibility to address this bottleneck is to establish incentives through some funds, such as [Brazil’s] Fust, for example, to encourage and stimulate the sustainability of the business and for the mass use of this technology,” Lopes told the event.

During the Mobile World Congress in Barcelona, in February, Huawei’s regional VP Atílio Rulli also promoted the use of funds, or even tax benefits, to lower production costs and increase equipment demand. 

Rulli added that Huawei is considering manufacturing CPE in Latin America, notably in Manaus, Brazil.

According to GSMA, regional mobile operators are already using 5G for fixed wireless access to drive early broadband adoption in markets such as Brazil, Colombia and Peru. These deployments are still limited, however.

GSMA estimates that by 2025, the total number of 5G FWA connections in 52 countries that had launched or announced FWA 5G services as of June 2022 could reach 40mn, compared with only 4mn connections in 2021. Almost a fifth of these markets, including Brazil, are projected to have more than 1mn FWA 5G subscribers by 2025, according to GSMA.

In Puerto Rico, ISP AeroNet launched its HomeFi FWA broadband service in 2021, which is reportedly capable of providing download speeds of up to 100Mbps, using 3.5GHz licenses acquired in a 2020 spectrum auction.  

América Móvil, the region's largest telecom group, is betting on 5G for both FWA and mobile operations, potentially in every market where it operates with 5G spectrum. 

“Yes, we're going to do 5G for fixed [connections] and we're going to do 5G for wireless. We’ll have an infrastructure rollout program for 5G that includes phones and fixed [lines],” CEO Daniel Hajj told analysts last year.

In June 2022, América Móvil had 3mn FWA customers, including in Europe (Austria), according to Hajj.

Brazilian electronics manufacturer Intelbras is investing 100mn reais (US$19.8mn) over five years in the development of 5G CPE as part of an agreement with Qualcomm, which is providing the chipset and wireless transmission platform embedding the module.

The contract was signed in July 2021 and guarantees local exclusivity to Intelbras in the development of 5G routers and CPE with Qualcomm technology.

In an interview with BNamericas, Intelbras’ head of networks, Amilcar Scheffer, said the current activation and installation cost for each fiber broadband access, including costs for technicians, licenses and cables, was around 1,000 reais.

With a 5G CPE, these costs would disappear Scheffer said, so the product must be cheaper than 1,000 reais. “We are very close to that [ideal] value,” he said without specifying what that was.