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T-Mobile expands 5G fixed wireless across three more states

After pushing fixed wireless broadband with help from some star power in Super Bowl Sunday ads, T-Mobile has expanded the reach of its 5G home internet service in Indiana, Kentucky and Ohio.

It brings the operator’s 5G Home Internet offering to 62 cities and towns across the three states, with coverage spanning nearly 5 million homes. Overall, T-Mobile says 30 million homes are eligible for its fixed wireless access (FWA)-based service across the country.

Wednesday’s announcement highlighted part of T-Mobile’s strategy on FWA to make moves in markets where there is little or no choice for traditional broadband. According to T-Mobile at least 3 million people in those three states don’t have access or only have one broadband provider option.

In the announcement, Akron Mayor Dan Horrigan emphasized that T-Mobile’s expansion is helping to make broadband access more equitable.

“In Akron, families rely on home broadband now more than ever before,” he noted. “But throughout the pandemic, options for reliable connectivity have been lacking, and for some households, non-existent.”

T-Mobile charges $50 per month for home internet with autopay and guarantees no added taxes or fees, price hikes, equipment costs or data caps. Customers self-install a gateway in what T-Mobile says is a 15-minute process.

Although T-Mobile is bringing in FWA subscribers beyond rural areas, with additions from urban and suburban customers in the mix, a recent Evercore report suggested areas with few options are where fixed wireless has some of the most potential. Overall, the firm found that fixed wireless speeds from different providers across the U.S. varied widely and that cable or fiber often delivered better performance.

The expansion gained praise from local and state officials in Kentucky and Ohio.

In a statement Kentucky State Representative Mary Beth Imes said thousands more households now have access to unlimited high-speed internet.

“T-Mobile Home Internet has expanded access sin Kentucky, bringing our state a real competitive option for broadband where many households are still left without any option or any good option,” Imes said.

“Outside of urban areas with millimeter wave, cable and fiber are able to offer a superior product to fixed wireless, and we expect that many of the fixed wireless net adds in rural areas will be households transitioning from DSL to fixed wireless where cable or fiber is not available,” Evercore stated.

That said, New Street Research last month noted that when FWA additions from the likes of T-Mobile and Verizon are factored in (which totaled 302,000 combined), cable lost share of the overall broadband market in the fourth quarter of 2021.

“If this result holds, the last two quarters may be the first time Cable hasn’t taken share in well over a decade,” New Street’s Jonathan Chaplin wrote in a February note to investors.

T-Mobile surpassed its FWA goal in 2021, ending the year with 646,000 home internet customers after adding 224,000 FWA subs in Q4. The operator is aiming to increase its fixed wireless subscribers to 7 million to 8 million FWA subs by the end of 2025. Verizon, which has its own 5G and 4G LTE home internet offerings, added 78,000 FWA net additions last quarter, ending the year with a total of about 223,000.

In predictions for 2022, LightShed Partners last month forecast T-Mobile and Verizon will add 1.8 million wireless home broadband customers this year, more than doubling what they added in 2021. The firm cited spectrum depth as the key to speed and capacity carriers need to play competitively in the home broadband market.

“They have been spending tens of billions of dollars on this valuable asset and now they plan to deploy a ton of it,” wrote LightShed analysts in January.

Still, some analysts, such as those at MoffettNathanson, see T-Mobile’s target as a challenge.

“The math of acquiring 7-8M customers from an addressable pool of just 30M is daunting enough – it implies something between 23 and 30% penetration of addressable homes, an arguably absurdly ambitious target,” wrote MoffettNathanson analysts in a December report.

Part of the challenge Moffett Nathanson highlighted relates to capacity and aligning FWA subscribers with cell sites or sectors that have the most available, as operators want to make sure more valuable mobile customers don’t have their experience hampered by FWA usage.

“It will be relatively easy to acquire FWA customers initially, when almost all cell site sectors are 'open,' but it will get harder and harder over time to match demand to precisely those pockets of supply where the network can safely tolerate loads of this magnitude,” Moffett noted.

To not oversell, T-Mobile places a cap on the number of FWA customers it will take on in addressable markets, and once it hits a certain threshold in an area, closes it off to new customers until someone drops the service.

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