Here’s what T-Mobile has learned about stealing home broadband customers from Big Cable

A new T-Mobile report has some unexpectedly nice things to say about their competitor Verizon—but cable companies will find it less heartwarming reading.

T-Mobile’s 2022 State of Fixed Wireless report, released today, draws on third-party research as well as the carrier’s own data to chart the growth of fixed wireless access (FWA) connecting homes instead of smartphones.

In terms of total subscribers, FWA has taken off over the last year at T-Mobile, with 1.7 million new subscribers between the fourth quarters of 2021 and 2022 alone, compared with 870,000 new fixed-wireless customers at Verizon over the same time period. 

T-Mobile now has just over 2.1 million FWA subscribers; Verizon has close to 1.1 million—the former carrier touts about 40 million households covered, the latter some 30 million. 

Kaley Gagnon, a T-Mobile marketing vice president, brags a little: “FWA, it is such a great growth story.”

Meanwhile, other major broadband providers combined for 713,000 new subscribers and the two largest, Comcast and Charter, saw subscriber growth stall for the first time ever earlier this year.

T-Mobile’s Home Internet wasn’t even a thing until the company launched 4G LTE home broadband service in March of 2019, and then began selling 5G home internet in April of 2021. It charges $50 a month for unlimited service—a promotion starting December 8 will offer it for $25 with a T-Mobile wireless line—with download speeds listed as ranging from 33 to 182 Mbps (the report cites a 145 Mbps average) and uploads of 8 to 25 Mbps.

Verizon got a later start, since it had to wait for C-band 5G spectrum to come online in January to offer 5G service outside patches of urban markets. Its 5G Home costs $50 a month on its base plan—$25 with many of its unlimited smartphone-data plans—and offers estimated downloads at 85 to 300 Mbps and uploads of around 10 Mbps, also without data caps.

Those download speeds compare poorly to what most cable providers can offer—many now tout connections as fast as a gigabit per second—and the uploads only look decent next to cable’s generally pokey upstream speeds.

But a survey T-Mobile conducted in the third quarter shows that 51% of its fixed-wireless subscribers came from cable providers, with the remaining 49% either coming from other types of ISPs (often slow DSL and expensive, data-capped satellite) or no home broadband at all.

The same survey data suggests that, while these new wireless subscribers may not have a need for speed, they do dislike rate hikes. The No. 1 reason for switching, cited by 58% of customers: getting a lower price. After that, 41% of switchers pointed to T-Mobile not requiring an annual contract.

“The industry has kind of pushed consumers to think that they need to max out speed,” says Gagnon. “Hey, don’t pay for a gig if you don’t need it.”

Many incumbent cable operators, meanwhile, seem undeterred by negative consumer sentiments. Comcast, the largest provider in the U.S., has made rate hikes a holiday tradition, with the latest round raising broadband rates by $3 a month—but only for subscribers who don’t pay for its TV service.

Cable operators also continue to foist “exploding prices” on customers that can double or more after a promotional period, while T-Mobile and Verizon tout rate guarantees.

But while the data caps enforced by Comcast (whose subscribers outside the Northeast can get dinged for overage fees after using more than 1.25 TB a month) and other incumbents often fuel customer complaints, they don’t appear among T-Mobile’s top subscriber-cited reasons for switching.

T-Mobile’s report suggests that most of its users weren’t at risk of data overages. Its home-wireless customers average 478 GB of data a month, compared with an industry average of 496 GB according to the research firm OpenVault, and 23% use less than 100 GB a month. Only 11% use more than 1 terabyte a month, a typical data-cap ceiling.

Saying “We can deliver for those customers that are on the top end of the spectrum,” Gagnon dismisses concerns that T-Mobile will have to follow the path of another promising fix for broadband gaps, SpaceX’s Starlink.

That low-Earth-orbit broadband satellite constellation has seen performance in the U.S. strain under demand and is now implementing a “Fair Use policy” that sets a 1 TB threshold, above which subscribers may see speeds restricted.

Neither the report nor T-Mobile’s network-disclosures page offers details about reliability; reviews at the likes of CNet and PCMag haven’t reported downtime but have called out varying speeds, an issue Comcast has suggested as a weak point in ads targeting T-Mobile’s home service. Gagnon says T-Mobile effectively rate-limits its own rollout of home 5G to avoid those problems.

“We’ve been very deliberate,” says Gagnon, explaining that T-Mobile checks capacity on a house-by-house basis before showing eligibility for service at a particular address. “That’s both a current model and also a future forecast model.”

The carrier will need to keep tuning that model—and may need to deploy some of its underused, fast but short-range millimeter-wave 5G spectrum to augment home-wireless capacity—to satisfy the 7 to 8 million FWA subscribers it expects by the end of 2025.

But T-Mobile and Verizon aren’t the only wireless carriers to see an opportunity to steal share from wired incumbents. An Ericsson report released late last month  predicted 19% year-over-year global growth for FWA from 2022 through 2028, with 300 million connections worldwide by the end of 2028.

In fewer words: After years of cringe-inducing 5G hype, the wireless industry has an application for the technology that actually addresses a real-world problem.