T-Mobile Begins Fixed Wireless Assault

T-Mobile says it is expanding its $50 a month home internet service to more than 450 cities and towns--representing 20 million people--where AT&T has halted all future sales of digital subscriber line services. That likely equates to 10 million or so locations. 

It’s a clever bit of marketing, but it is not so clear that the move actually is “new.”

T-Mobile has promised to substantially invest in wireless internet access facilities for millions of U.S. consumers as an outcome of its merger with Sprint. T-Mobile had said it would cover “more than half of U.S. households with 5G broadband service--in excess of 100 Mbps--by 2024. 

T-Mobile US execs also suggested that a service offering 100 Mbps would be a competitive alternative for perhaps 19 percent  of the population. By 2024, as much as 35 percent to 45 percent of the U.S. population might be candidates for a mobile substitute product, T-Mobile argued prior to the merger with Sprint. 

Looking at fixed wireless, T-Mobile US estimates it could provide service to 9.5 million households early on. By 2024 T -Mobile expects to be able to reach 52 million rural residents with a fixed wireless solution.

So one way of evaluating the “new” T-Mobile offer is that it will build its new home broadband service first in areas where AT&T is most exposed; where AT&T has copper access only; and where AT&T is likely to respond with its own wireless access option. -

The upside for T-Mobile is product substitution, allowing it to take market share in the home broadband market dominated by cable operators. Fixed wireless also is viewed as important for AT&T, Verizon and cable operators as it offers better sustainability for home broadband services in areas of lower population density. 

And that could change market share in the fixed networks business, allowing mobile operators to take share from fixed network operators. 

To be sure, it has always been clear that the primary target of T-Mobile’s wireless home broadband service would be cable operators, who have 70 percent of the installed base of home internet connections. 

Nevertheless, it also has been clear that the best prospects would be price-sensitive or low-usage households who can get along well with limited downstream speeds. 

T-Mobile does not specify speeds for the expanded home broadband service, but had been testing 50-Mbps service in early trial markets. The fact that T-Mobile does not specify speeds suggests that downstream speeds may well vary from market to market, and might not be as high as 50 Mbps.