AT&T: Fixed wireless local loop will require installations at cell sites and customers' homes -- but tech is unproven

AT&T's (NYSE: T) proposed fixed wireless local loop (WLL) service would require installations of network gear at cell sites and in customers' homes, but AT&T is not sure that the technology will pan out as a replacement for fixed broadband service.

The carrier has said it is currently testing fixed WLL technology in select areas of the country with local residents who want to try the service, including in Alabama, Georgia, Kansas and Virginia, and is seeing speeds of around 15 to 25 Mbps.

"Our innovative fixed wireless program that delivers broadband through the air using base stations and fixed antennae on customers' homes or buildings can be a way to deliver high quality, high-speed Internet access service to customers living in rural areas," the carrier told FierceWireless. "We are unable to discuss future plans at this time but are excited about bringing additional Internet connectivity options to rural areas."

If AT&T moves forward with the fixed WLL deployment, it could represent a new opportunity for installers for both field and in-home installations. It's also unclear how long the installation could take.

AT&T's fixed wireless local loop trials likely stem from the operator's acquisition of DirecTV, which closed earlier this year. As part of its proposal to acquire the company, AT&T promised to deploy fixed WLL to about 13 million rural customers across 48 states. However, fixed WLL was not included in the final conditions of the merger.

In a filing with the Securities and Exchange Commission earlier this year, AT&T said its fixed WLL deployment is expected to use 20 MHz of spectrum (10+ 10 MHz paired uplink and downlink). "The service will incorporate advanced technologies, including professionally installed customer premises equipment, that significantly enhance spectral efficiency and signal quality," AT&T said in the filing.

In terms of what customers can expect from fixed WLL, the carrier said its "current expectation is that this product will perform as well as wireline broadband services advertised today at 15-20 Mbps. Our best estimate based upon the lab simulations to date (which will be validated with field trials later this year) is that even customers at the cell edge will experience speeds greater than 10 Mbps more than 90 percent of the time. Those speeds will be significantly better in off-peak periods. Customers located closer to the cell tower will experience even better speeds."

However, AT&T said that "one of the main impediments to deploying fixed WLL to date has been high deployment costs," requiring "substantial upfront investments."

Importantly, from an installer's perspective, AT&T said it "must install additional antennas and other equipment at each cell site in areas it seeks to serve. In addition, unlike with mobile wireless service, AT&T must send a technician to conduct a professional installation at each customer's location."

AT&T said it will "incur additional costs processing changes in service, addressing outages or other issues that can arise, and providing ongoing customer service support."

Yet AT&T pointed to what it said are some of the challenges associated with fixed WLL service. AT&T said its "ability to recover these high upfront and operational costs is subject to considerable constraints" and that fixed WLL service is "a relatively untested technology, and in many areas it would have to compete with more familiar broadband solutions. Its success in the marketplace is thus unproven. In addition, due to spectrum capacity constraints, the number of subscribers to whom the services can be marketed must be limited to maintain service quality in periods of peak usage."

"That fact limits the revenues available to justify investment in fixed WLL," AT&T added. "It is also difficult to predict the useful life of a fixed WLL deployment because new technologies may arise that will cause customers to expect higher speeds than fixed WLL can deliver. These risks significantly reduce the prospects for a successful rollout by AT&T of fixed WLL as a standalone product."  

For more:
- see this SEC filing

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