The following transcript has been edited for length and readability. Listen to the entire discussion here on The Broadband Bunch. The Broadband Bunch is sponsored by ETI Software.
Brad Hine:
Hello, everyone in broadband land. Welcome to the Broadband Bunch. I’m your host, Brad Hine, coming to you with stories, stats, and samples from the world of broadband. I am very fortunate this week to be in Louisville, Kentucky, and attend the WISPA America Conference. For those that don’t know, WISPA is the organization, Wireless Internet Service Provider Association, which manages the fixed wireless industry through its organizational ties. They have a couple of different conferences a year where people come out of the woodwork and share amazing knowledge.
Today, with us, I have Jeff Moore who was a speaker, and Jeff is also the CEO and Founder of Wave7 Research. Jeff was a speaker for us and did an episode at the end of 2022. And we were so impressed that Jeff does a quarterly report on a lot of the data in the wireless industry that we wanted Jeff to come back and talk to us on a regular basis. Jeff, welcome to the Bunch.
Jeff Moore:
Thanks for having me, Brad.
Brad Hine:
So, Jeff, it’s been a few months since we spoke, and fortunate to see you here at the conference today. Tell us a little bit about what you did this week and maybe a little bit about the topic of your session.
Jeff Moore:
Yeah. So, my first time ever in Louisville. It’s nice to be here. It’s a big city. The weather’s wonderful while we’re here. But yeah, so this morning I spoke at WISPA America 2023 and gave a briefing to the attendees about the latest on fixed wireless competition. And I guess, the biggest thing that I started with, is there are some new numbers out from Lightman Research Group. They said that the share of broadband ads for 2022 based on their figures was about 90% for fixed wireless, and they defined fixed wireless as T-Mobile plus Verizon internet customers. So, that excludes the 2,800 WISPs that are out there. The total numbers were 3.2 million wireless ads in 2022, about 500,000 wireless ads for the cable industry, and nearly 200,000 wireless losses for the telcos.
Brad Hine:
Wow. So, in your data analysis, what does that tell us, someone, who’s reading through this data?
Jeff Moore:
Well, there’s enormous growth, and I think that this is exceeding the expectations of all the analysts that I know, the number of ads that T-Mobile, in particular, as well as Verizon had in 2022. We look at some of the forecasts from Wells Fargo research, and they have this peaking in 2023. In terms of the share of net ads, wireless is probably going to hit its peak this year.
Why all the sudden activity? The answer to that is a simple one. Verizon didn’t have the C-Band spectrum available until early 2022, and they rolled that out. And T-Mobile has finally gotten its marketing machine fully up and running with the 2.5 gigahertz spectrum that they acquired in the Sprint deal, and they have that now fully functional. And they’re at the stage right now, the last three quarters, they’ve added more than half a million subscribers per quarter. So, you can walk into any of the 7,000 T-Mobile stores or any of the 7,000 metro stores and sign up for service.
Brad Hine:
Wireless is growing like crazy, clearly. Clearly.
So, let’s talk about the topic of your session this morning that you participated in and maybe some of the other panelists, and what were the general ideas you were trying to get across to the audience here?
Jeff Moore:
One of the big insights from my talk, and some of the other speakers touched on this as well, is that it’s without question, that T-Mobile and Verizon added 3.2 million subscribers last year, like I said. So, they’re clearly dominating, and they have giant marketing machines, very powerful organizations, and they’ll continue their growth. That being said, the WISPs have the home-field advantage. They know their local community, they know their local topography, and they can win in areas where Verizon and T-Mobile are not really focused.
Brad Hine:
So, you can’t be everywhere at all times then. You’re saying there is an advantage for these local WISPs to be in this market over the big guys. And how is that in a little more detail?
Jeff Moore:
Well, for one thing, they can do community-focused events and efforts. Some of these WISPs are very local. They may be on the softball team, or they may go to church with some of their customers. So, the word is not so much about advertising, but getting the word out in other ways, appearing at community events, using Facebook, using social media to get the word out, as well as just making sure that, you have a good reputation by word of mouth. One WISP that I mentioned during the talk has an offer where they’ll give you free service for a limited time if you put a sign in your yard that advertises the service.
Brad Hine:
Ah, that’s great. So, a little local promotion?
Fabulous. I’ve heard of that with other municipal and local internet services, whether it’s wireless or sometimes, it’s fiber in a muni electric coop. How have you seen that grow? I mean, how does that, especially in a local community? I’ve seen it catch on like wildfire and it starts to be a real competition point against the larger carrier in the area that can’t be as customer centric.
Jeff Moore:
Because one of the WISPs I talked to said that they have a chat line, and you can just log onto their website and you say, “Yeah, I’m having a problem.” Then it may be that, within the next minute, you’ll get an answer back from one of their techs saying, “Oh, yeah, it’s your router” or “Yes, our tower is down.” And you can get immediate feedback, and try getting that level of service from a multi-billion dollar corporation.
Brad Hine:
Right, where you’re going to have to log in and wait on hold, and then wait 30 minutes for another recorded message, and then go into a queue. And then all of a sudden, you can’t get any further until you press one, two, three, or four on your phone to figure out how they’re going to categorize your call.
Little by little, you’re still without internet. I will always say that now the internet, whether it’s fiber, whether it’s fixed wireless, it’s the second utility in this country now. We absolutely have to have it. If I’m without heat, say in the southern United States, if I’m without heat or gas for a half-day, I put a blanket on, and I’m okay. I wait till the gas company comes out and they fix it. If I’m without internet for 30 minutes and I have remote work, say our kids are home from school having to do remote school or trying to do their homework, you’re on the phone with your carrier trying to figure out why you don’t have internet immediately.
Jeff Moore:
Exactly. Yeah, it really is crucial. Actually, that brings up another area where I think WISPs have a big advantage. They can provide a redundancy solution, particularly in the business space. I know that T-Mobile has actually addressed this, that in the business space, a lot of customers are relying on fiber or relying on cable, but these businesses can’t afford to be out of business for a day or for a week. So, they have T-Mobile as a backup solution, and I think a lot of WISPs are taking advantage of that.
Brad Hine:
That’s a great point. That’s a great point. In terms of diversifying and providing that backup, we are also seeing a lot of the money in the space obviously coming to a fiber or even a WISP show in the last couple of years with all the money that’s being put into the market, either by the government or private equity money. We’re starting to see hybrid strategies from some of these WISPs that are deploying fiber as well as their traditional fixed wireless.
So, what’s interesting to me is now they’re having to operate two types of plants and figure out how that works together. And they can strategize their saturation areas to maybe fortify with fiber at a certain point over fixed wireless. And as they grow now, they have two strategies to grow their footprint. Can you make a little comment on hybrid networks and what you’re seeing in that industry?
Jeff Moore:
Yeah, absolutely. This is a multi-year trend, and this is something that we’ve observed at various WISPA events that we’ve attended in the last few years, but really, I’d say it’s growing. And one absolute conclusion, everyone I talk to seems to agree that nearly all of these WISPs, or at least most of the ones that I’ve talked to, are increasingly rolling fiber as a part of their mix. So, there’s no question that there’s a growing tendency to do that.
So, I’ve taken it to the next level at WISPA America 2023 by asking people. I’ve done an informal poll of WISPs that I’ve talked to and asked them, giving them three choices, so why are you increasingly looking to fiber? And one choice was, well, it’s government funding because some of the government funding programs require you to use fiber. The second possibility is economics. I mean, economics can vary depending on your topography and your population density, for sure.
And then the third possibility, is it just customer preference? The customer would rather have a fiber connection to his home or business. And the answer came back all three, but government funding actually is the number one answer. And one of the top WISPs I was talking to yesterday said it would be a tie between the other two. He said that economics was a huge part of it, but he also made the point that customer preference in a lot of cases was a big decider.
Brad Hine:
Gotcha, gotcha. So, the government is through the funds that they’re granting to people, they’re mandating that they go fiber. There’s no choice just to beef up with higher bandwidth wireless, you’re going fiber. That’s what these programs are telling these WISPs. Is that what you’re saying?
Jeff Moore:
Absolutely. Although one large WISP we talked to said that the wireless technologies are getting so good that he’s feeling less and less of the need to choose the fiber, that’s the exception rather than the rule, I would say, because I think that still, we’re seeing an increasing movement towards fiber. And also, I think it’s fair to say that it really depends on the topography and the population density. So, if we’re talking about MDU, then you really need to get fiber there. And then if you’re maybe in a heavily wooded area, fiber might make more sense because you might not be able to get the signal through the trees quite well enough. So, I think that topography and density make a big difference.
Brad Hine:
That’s a great point. Obviously, they suit the geography of each technology. I was on the expo floor the other day and meeting with all the different vendors and all the booths and hearing about everything that they’re doing that’s new. And I’m always curious and interested in the devices, the new devices, what are the new devices out there offering either more spectrum or better connectivity or just a larger bandwidth. It was very interesting to me to talk about some of the strategies on the wireless side. In terms of MDUs, clearly, fiber is very important going to an MDU. But in saturated areas, they were using Wi-Fi just to bridge that gap, which I thought was very simple or a little more simple and economical.
Jeff Moore:
Well, the MDU, serving the MDU via MM wave has been a different business model. And ironically, we’ve had a company crash and burn on that topic recently.
Star Internet actually was the only WISP that I know of that’s publicly traded, and they were very well-funded. They acquired a great deal of MM wave spectrum around the United States, and they recently filed for bankruptcy. Now, they’re saying that they’re going to emerge from bankruptcy and continue to compete, although they’re not going to compete in Columbus Ohio anymore. So, yeah, this bankruptcy of Star Internet has made me question the business model that they had, which is basically you go from rooftop to rooftop with an MM wave solution, and then you use the internal wiring. So, I’m not saying that’s not a viable business model, but the bankruptcy of that effort is not a good sign.
Brad Hine:
Clearly, clearly. Along that thinking or along that route, obviously, what we’re trying to do is deliver more bandwidth to folks through fixed wireless technology. Are you seeing now that’s still growing? In terms of being able to offer fiber, clearly, that opens a pipe and gives residents and commercial businesses a connection to a big pipe and bandwidth. But on the wireless side, are you seeing that that technology is growing and equaling or competing with the fiber?
Jeff Moore:
Yeah, I think so. One of the large WISPs that I was talking to yesterday was making the point that he’s seeing such improvement in the equipment that he’s using. He didn’t specify the vendor, but he’s seeing such improvement that he doesn’t really feel the need in most areas to roll out fiber. That fixed wireless, depending on what equipment you use, can provide speeds of up to one gigabyte. So, why bother with the fiber rollout and all the complications and the permitting and all the rest when you can just get a signal directly there?
Brad Hine:
That’s fascinating because when I’ve talked to WISP organizations, especially the ones that are privately held and they operate on a bootstrap budget, some report being able to set up a brand new tower in a matter of a couple of days and get things running for a rural area is rather quick instead of, as you mentioned, the permitting involved, all the planning involved that it takes to run fiber either in the ground or on poles, which is other folks’ property, running it on a pole. So, yeah, there’s a lot of… That’s great to hear that gigabit connectivity through fixed wireless is out there and we can access it, and then it’s just easy to set up and get people rolling for a much lower price point too.
Jeff Moore:
Yeah, absolutely. And yeah, you mentioned the tower ecosystem. And certainly, the tower ecosystem is loud and proud here at WISPAmerica 2023. I’m thinking of Crown Castle in particular. They have a solution that’s out there for WISPs and it’s very easy. You can just log on and learn all about it. Their booth looked pretty busy to me, explaining the solutions that they have for WISPs. They have the towers, they have the access, and they can help with rollouts.
Brad Hine:
Fabulous. So, any other highlights before we sign off today? Any other highlights from the conference this week that you want to report to our audience?
Jeff Moore:
Well, basically, I think it’s been a really good conference. The conference halls have been packed, with great attendance, and a busy show floor. I just think it’s been a good show overall.
Brad Hine:
Agreed, agreed. And I’ll say for the Broadband Bunch, this is the first WISPA event that we’ve been at in three years since the pandemic started. So, it’s great to now put a face with an email, a face with something that you’ve only seen on a screen on a Zoom call or a Teams call in the last few years. And I feel like we’re back. There’s fabulous attendance here. This year was actually a lot larger than I thought it would be at the conference area. And the vendors, I think there was approaching over 60, maybe 70 vendors that were here for WISPA America.
Jeff Moore:
Right, yeah. And one other trend that we’re seeing is I think there’s a lot of investment in M&A activity going on, and some of these have been announced publicly. I guess there’s a large investment in Rise Broadband, which is the largest independent WISP as being one of the ones. And then there are some others that I’m not really ready to talk about, but I’ve heard about here on the show floor, and we’ll disclose that in some of our reporting for Wave7 readers. But just in general, I’d like to say that there’s a lot of deal-making going on, a lot of investing going on, and not all of it is even American. We’ve heard about a European investor who’s here at the conference, so I think there’s a lot of activity going on.
Brad Hine:
Agreed. I’m having a lot of those discussions too, about private equity groups and investor groups. They’re learning how to start up a broadband business, get it running, all the tools you need to do to help automate it and make it more economically feasible for them to run. And then be able to allow someone else to acquire that business. Then I’ve seen in a lot of cases, they just start another one in another rural area. And so, it’s actually a great model to keep people connected, making sure we’re filling all those gaps in the American countryside.
Jeff Moore:
Yeah. And one other thing is that another big topic of discussion has been what other services can you sell in addition to just broadband access. And so, trying to dig down on that a little bit and how can WISPs make money, and technical services in the home is one that I’ve heard people talking about. There was one WISP from Mississippi who was very eagerly talking about selling phone service. People who still have a dial tone-
They have access to class-5 five switches, and they can easily handle your call. And he was very trippy about how easy it is for him to sell voice services. Others are looking for a VoIP solution.
And then one other topic that’s a big one for me is linear video. And certainly, there are some vendors out there. I’ve seen DirecTV Stream on the show floor. I’ve seen Dish Network on the show floor. So, certainly, there are linear video solutions that are out there and are being pitched to WISPs. But most of the WISPs I’ve talked to think that it’s very complicated to do and very difficult to do. And so, they’re not really providing a linear video solution. They’ll just provide the broadband connection and let people go over the top with their video with Netflix, Hulu, YouTube TV, or whatever their preference is.
Brad Hine:
That’s a great point, because in content, we’re seeing a lot of, obviously, for those who have smart TVs where you can easily access apps from all the different content providers that are out there now, and it’s being divided up. So, I also am seeing the same thing. It’s funny, the generation, my son’s generation, he’s 15. He doesn’t consume any linear television unless it’s an NFL game. And even then, we’ve seen this on Amazon, the Amazon Prime app on the television on Thursday nights. Then we’re starting to see, well, I think, was it YouTube TV just got the NFL rights. Didn’t they?
Jeff Moore:
Right. So, yeah, I think you’re right about that. And I think that this is to some extent a generational thing. I’ve had this discussion with my sons. They think it’s odd that I still have a linear cable video subscription because they just do the over-the-top video. But I think that one other point that you talked about, I know that you like to watch college football, and that’s a live event. So, there’s still a need out there to have live TV broadcasting depending on the vertical that you’re talking about. So, I guess, sports and news would be probably the two biggest applications.
Brad Hine:
Absolutely, always consuming news over linear television. I will say, I think I made a comment to you a little earlier today when we were chatting that one of my favorite SEC teams had a game a couple of years ago on ESPN3, which actually is only an internet channel for us. It’s not in our package. So, we had to quickly figure out how to watch our Georgia football game that day. And so, of course-
Yeah, decent. They’ve done okay in the last couple of years. But of course, me being a bit older, I put the onus on my son to try to figure that out. And he figured out how to put a Roku on TV and then streamed it from a channel that he found. So, thank goodness for the generation coming in.
Anything else you want to report, Jeff? It’s been a great show. I welcome you back to the show. And I’m also looking forward to chatting with you next quarter about some of your findings. Anything you want to add as we get to the end of our show today?
Jeff Moore:
Yeah, just want to emphasize where I think the market is headed. So, yeah, wireless totally dominated ads. Like we said at the beginning, 90% of net ads for broadband in 2022 were done wirelessly, speaking of obviously T-Mobile and Verizon. If we had the figures for the 2,800 WISPs, I’m sure that number would be even larger. So, I think that’s a trend. And we’re looking at probably the peak year for domination by wireless carriers is probably 2023. They’ll continue to grow their numbers. But the share of net ads might slip a little bit in the next few years.
But yeah, I think that it doesn’t mean anything that the WISPs need to close up shop or anything like that. 3.2 million ads from Verizon and T-Mobile. But still, I think that the WISPs, if they really play to their strengths, their home field advantage, the local touch, the good customer service, and knowing the topography and knowing their community, they can still win and grow.
Brad Hine:
Excellent, excellent. Thanks again, Jeff, for joining us today. It’s great to see you here at WISPA America in Louisville, Kentucky. From the Broadband Bunch and your host, Brad Hine, I’ll sign off for now. And I look forward to seeing you maybe next quarter.
Jeff Moore:
I’ll look forward to it.
Brad Hine:
Thanks, Jeff. Bye-Bye.
