Tag Archives: T-Mobile

Rural 5G

The FCC voted last year to launch the 5G Fund for Rural America to expand 5G coverage into the many parts of country with poor cell coverage. It may turn out that market forces might mean that some of that subsidy won’t be needed since the big carriers are expanding into rural areas. A recent blog from Ookla documents the rural expansion of 5G. Ookla concludes that fierce nationwide competitive pressure is driving the carriers to look harder at rural areas to gain every possible customer.

Ookla, which collects a huge volume of speed tests, is one of the few companies that can look at carrier expansion using its own data. When Ookla sees multiple speed tests on 5G, it has definitive proof that coverage is present in an area. Ookla looked at the recent rural expansion from each of the three primary carriers.

T-Mobile. Ookla shows that T-Mobile has the largest rural 5G footprint today. T-Mobile claims it covers 323 million people, or 98% of U.S. households with 5G using its low-band 600 MHz spectrum. This low-band spectrum carriers for a greater distance than the spectrum used by other carriers. The company was required to expand coverage to 97% of the population as part of the agreement with the FCC when it purchased Sprint. I have to wonder about the 98% coverage. If you look closely at the FCC cellular maps, T-Mobile shows coverage of very slow speeds over a lot of rural America, and you have to wonder if this coverage is real enough to even use for voice calls.

T-Mobile also is the fastest carrier in much of the country, which came from the deployment of the 2.5 GHz spectrum that the company acquired with the Sprint purchase. The company has used the 150 MHz band of the spectrum to increase speeds in the top 100 markets in the country. We know that T-Mobile has rural plans since the company announced in 2024 that it is hoping to achieve a 20% market share in rural America by the end of 2025. That claim is bolstered by the pending close of the purchase of 30% of the spectrum and all 4.5 million customers of UScellular.

AT&T. A lot of the company’s rural expansion comes from FirstNet. This is a nationally funded program to create a nationwide first responder network. AT&T was awarded $6.5 billion to build the network and also given 20 MHz of 700 MHz spectrum. FirstNet brought AT&T a 25-year contract with the government. There is an expected $2 billion additional investment to upgrade the network to 5G everywhere.

One of the key requirements for FirstNet is that it must be made available to first responders in rural areas. This led AT&T to install FirstNet on all of its own towers and to build over 1,000 rural towers. AT&T announced in October 2024 that it has 6.4 million connections and 29,000 public safety agencies on the network. AT&T has also invested heavily in spectrum auctions and spent $37 billion the FCC’s C-band and 3.45 GHz auctions.

Verizon. Verizon doesn’t own much low-band spectrum that would give it coverage in rural areas. Instead, the company relied on a technology called Dynamic Spectrum Sharing (DSS) that allows one spectrum band to toggle between 4G LTE and 5G  in 1 millisecond increments. While it works, this didn’t give the company the boost it was hoping for.

Verizon’s rural strategy seems to be through acquisition, and the company has bought cell carriers operating in Kentucky, Iowa, New York, Pennsylvania, Missouri, and Montana. Verizon is also buying $1 billion of 850 MHz, AWS and PCS spectrum from UScellular.

Verizon is betting on the C-Band spectrum that it purchased in 2021 for $52 billion. It’s hoping that the 161 MHz band of spectrum will carry it into the future. The company has announced it intends to deploy more rural spectrum,

None of the carriers are likely to expand into sparely populated rural areas where coverage is often nonexistent. But the current expansion plans likely will bring cellular relief to a lot of rural areas, long before any solution might come from the FCC.

Pushing the Speed Limit

Today’s blog is about several new fast broadband deployments. It seems that every year that vendors are developing new technologies that will speed up our networks and broadband connections.

The first was an announcement from AT&T that the company completed a live test of a 1.6 terabit fiber connection on a route between Newark and Philadelphia. The connection was tested over AT&T’s long-haul network that was also running 100 Gbps and 400 Gbps links.

The fast link was created by combining two 800 Gbps links created by white hardware operating with the Broadcom Jericho3 packet processor chip. The two links were combined using Ciena’s WaveLogic 6 Extreme cohere optical transponder. At the two ends of the link, the signal was processed by 800 G DR8 pluggable transceivers from Coherent which created the cross-connectivity to communicate with other packet and optical technologies.

This new link is four times faster than the 400 Gbps lasers that are being installed nationwide as the newest iteration of ling-haul and middle-mile networks – replacing the 100 Gbps lasers that were the standard for the last decade.

Lumen announced that the company successfully created a 1.2 terabyte connection connection on an 1,800 mile long link. The link was accomplished on what Lumen calls its ultra-low-loss (ULL) network. The test used Ciena’s WaveLogic 6 Extreme technology and Ciena’s Waveserver platform along with Juniper 800 Gbps routers.

The AT&T news release of the test quoted Mike Satterlee, VP of Network Infrastructure and Services as saying that these tests are vital for AT&T to keep up with future demand. He was quoted as saying that AT&T expected that overall long-haul network traffic will be doubling by 2028.

The other groundbreaking speed trial was conducted by T-Mobile. The company was able to achieve a 6.3 Gbps connection on a Samsung Galaxy S25 cell phone. The phone was using the Snapdragon X80 5G modem-RF system. The 6.3 Gbps test was achieved in the lab, and the speed achieved on a real-world 5G network was 4.3 Gbps. A second test achieved the same speeds using a non-commercial handset that used Qualcomm’s X85 5G Modem.

The network test was conducted using Nokia’s 5G radio access RAN. The sped was achieved by aggregating 2.5 GHz, AWS, and 600 MHz spectrum. The test was not as much about speed as it was the ability to combine multiple frequencies to create a high-bandwidth path.

These trials are proof that carriers are constantly pushing vendors to develop the next-generation of network gear that brings greater capacity. Middle-mile and long haul routes are under strain from unexpected traffic from AI data centers. But long-haul network operators are reporting a big uptick in requests for 100 gigabit data connections across markets and unrelated to AI.

Deprioritized Broadband

There is an interesting trend of ISPs selling broadband products that are not always guaranteed to be at the same speed and quality as other customers.

Throttling customer speeds is not new to the industry. Some of the companies that with long-time data caps throttle data to slow speeds after a customer reaches the monthly allowance of usage. Most such ISPs offer an alternative for customers to buy extra broadband to maintain their normal speeds. Some of the companies that have had this practice include the high-orbit satellite providers, cell carriers providing hotspot plans, and a handful of others. Many companies with data plans don’t throttle speeds and just automatically bill more for going over the data cap.

I’ve noted this practice again in recent years from the big FWA cellular providers that sell home broadband using cellular spectrum. AT&T, T-Mobile, and Verizon have all reserved the right to throttle customers any time that the network gets too busy. For example, from the terms from T-Mobile, “During network congestion, some T-Mobile internet customers might notice slower speeds, including Home Internet customers” Home Internet is the FWA home broadband product.

I’ve been able to observe examples of them doing this. I’ve seen speed tests from customers using FWA that have speeds over 200 Mbps during the year who occasionally get throttled down to just a few Mbps. I think these customers are surprised every time this happens and probably don’t understand or remember that the throttling is a part of the terms they agreed to.

It’s easy to understand why cellular companies would throttle home broadband customer first – they are protecting their cellular customers. I’m sure all of the FWA providers are happy with the new revenues coming from FWA, but T-Mobile is not going to let the home broadband for 6.4 million FWA customers threaten the experience of 130 cellular customers.

Starlink also throttles certain customers. One of the features of Starlink’s Away plan for campers and hikers is that Starlink reserves the right to throttle data usage if the network gets too busy. It’s also easy to understand this. As the RV products becomes more successful, it’s not hard to imagine a lot of campers coming together at the same location wanting to connect to Starlink. That traffic alone could overload a particular satellite, but Starlink is also shielding its customers who live in the same region and who are paying full price.

Starlink also reserves the right to throttle customers who buy its new ‘Residential Lite’ product for $80 per month. Rather than mention throttling, Starlink calls it deprioritization, “This service plan will be deprioritized compared to Residential service during peak hours. This means speeds may be slower for Residential Lite service relative to Residential service when our network has the most users online”. This term is at the top of the company’s advertising for the product, and they want customers who want the lower rate to recognize what comes with the plan. The company is making it clear that there are trade-offs for getting the lower price.

I’ve been thinking about all of these plans and net neutrality. One of the key features of the national net neutrality plan was that ISPs couldn’t engage in paid prioritization, meaning that a customer could not be charged more to be guaranteed a better connection.

It’s not clear to me that this practice violates that principle. In the case of the FWA products, every customer buying the FWA product runs the risk of having data throttled – there is no other class of customers with higher priority unless it’s cellphone customers. Starlink is a little different in that customers can save money by agreeing to possibly be throttled. Is having customers agree save money by being deprioritized the same as charging somebody else more to get a better priority?

It certainly doesn’t matter at the federal level since the Courts recently killed the appeal to the FCC’s net neutrality case – and the FCC would have killed net neutrality anyway if the Courts didn’t do it. It is a more germane question in California which adopted a state net neutrality plan that largely mimics the federal rules.

Devaluing Spectrum

Mike Dano recently wrote an article for LightReading that talks about the plummeting value of 5G millimeter wave spectrum. The FCC started the process of auctioning this spectrum in 2018, and Verizon, T-Mobile, Echostar, AT&T, and smaller carriers paid almost $10 billion for the 24 GHz millimeter wave spectrum. The unique aspect of the auction was the huge size of the channels and the first auction offered two blocks of 425 MHz, while the second auction offered seven blocks of 100 MHz.

At the time, this was touted as the spectrum that was going to supercharge 5G. Verizon launched a public trial using the spectrum in 2019 in downtown Chicago and Minneapolis. Customers with special phones enabled for the new spectrum were able to get speeds of 500 Mbps. Soon after, there were more trials in more cities by multiple carriers. You may remember the TV commercials at the time showing gigabit speed tests on cellphones.

Unfortunately, the trials showed the real-world limitations of the millimeter wave spectrum. The signal didn’t carry far, and small cell sites were needed every few thousand feet to provide coverage. While the spectrum could bounce off buildings to extend coverage, any object in the direct path of a cell tower blocked the signal, even the human body and glass windows. It also became quickly clear that, other than the novelty of being superfast, cell customers had no real need for gigabit speeds which greatly exceeded the computing capacity of cellphones. The real issue that made this unfeasible was the cost of a network. In this same time frame, carriers were all collectively touting they would deploy a half million small cell sites, but that effort died quickly when it became clear that there wasn’t any new revenue stream to pay for the new networks.

Interestingly, the rest of the world never put much faith in millimeter wave spectrum. Currently, many phones in the U.S. can still receive this spectrum band, but it’s not included in phones sold in the rest of the world.

Carriers have started the process of walking away or devaluing the millimeter wave spectrum. In July, T-Mobile walked away from 520 licenses for the spectrum, something that is almost unheard of in the carrier world. UScellular recently cut the value of the spectrum by half in its books.

This is not to say that there is no value in the millimeter wave spectrum. Verizon thinks this is the right spectrum to use in places like stadiums and other crowded outdoor venues. This is also a powerful spectrum to use indoors to carry gigabit speeds. The need of the millimeter wave spectrum became obsolete for cellular when the FCC auctioned C-Band spectrum in 2021, which behaves much better outdoors.

This is not the first spectrum sold at auction to be a bust. For example, the FCC auctioned Multipoint/Multichannel Distribution Service (MMDS) spectrum in 1995 and 1996. This was spectrum between 2.3 – 2.5 GHz that was touted as wireless cable TV. In the U.S. this was auctioned in 31 separate 6 MHz channels, each intended to carry one channel of cable TV. A handful of small cable companies made this work, but the idea quickly lost interest when channel lineups grew to hundreds of channels. The most memorable thing about this spectrum was a number of scams where license holders resold the spectrum to unsophisticated buyers.

The FCC also auctioned Local Multipoint Distribution Service (LMDS) spectrum in 1998. This was spectrum in the 27.5 – 31.3 GHz range that was touted as the future of point-to-multipoint wireless. The first gear was promoted as theoretically being able to deliver up to 100 Mbps for 1.5 miles, a remarkable speed at the time. However, the spectrum quickly fell out of favor when only a few vendors tried to market the radios – and all of the radios had been rushed to market and had big problems when deployed to customers.

The Ability of the FCC to Issue Fines

We are definitely entering into a new era in regulation. Verizon, AT&T, and T-Mobile are disputing the FCC’s ability to levy fines on them. The fines in question all stem from an FCC action to penalize the carriers for selling customer location data to aggregators. This data allows marketers to become intimately knowledgeable about where people spend their time every day. In the majority of cases, the carriers did not get permission from customers to share their data.

The carriers have all appealed the FCC action, and as is becoming a normal practice, each carrier filed an appeal in a different court. Verizon was fined $46.9 million and filed a brief in the appeal suit in the U.S. Second Court of Appeals. AT&T was fined $57.3 million and filed a brief in the Fifth Circuit. T-Mobile (including a fine against Sprint) was fined $80.1 million and is appealing in the DC Circuit Court of Appeals.

The FCC started the process of assessing the fines under Chairman Ajit Pai, who proposed the fines and said the carriers’ actions are a violation of customer privacy. The FCC under Chairperson Jessica Rosenworcel finalized the fines. Sharing customer data came to light when a sheriff in Missouri was openly using a location-finding service to track the people’s location. The sheriff obtained the data from Securus, a telecom provider that specializes in telecom services for jails and prisons. The FCC said that even after the carriers were made aware of the violation of customer privacy, they continued to sell the location information. The facts in the cases are a bit messy due to Securus’s role in the transactions and statute of limitations.

The three carriers are making roughly the same basic arguments. Verizon claims that the FCC overstepped its authority to enforce issues related to consumer data privacy. Of more interest is that AT&T and Verizon are both arguing that the Supreme Court’s ruling in Securities and Exchange Commission v. Jarkesy means that the FCC has no ability to levy fines and that the companies are entitled to a jury trial. It’s going to take lawsuits like this to define the limit on administrative agencies like the FCC to impose fines on anybody.

There is also a chance that the FCC could stop fighting for the fines. Proposed FCC Chairman Brendon Carr originally dissented against issuing the fines. It’s possible that the FCC could drop its opposition to the suits, which could stop the legal process.

The carriers must be hoping the suits get dropped. This does not seem an issue that the carriers would ever want to take to a jury. It’s not hard to picture a jury – on which every member likely has a cellphone – imposing much larger penalties on the carriers. I suspect most people are uncomfortable with the idea of their cellular carrier selling details of their daily movements to companies they never heard of. It’s not hard to imagine numerous ways that companies could misuse location data to harm people.

If these cases don’t make it to fruition, the courts are going to have to further test the idea in other suits that administrative agencies can’t impose fines. For now, the ability for the FCC to impose fines is in hanging in limbo.

Starlink in the News

There is a lot of speculation that Starlink is positioned to get a lot more federal subsidy from the BEAD grant program. There are a few things that have to happen for that to come to pass, but that is not the only news about Starlink these days.

Starlink announced in September that it reached four million customers worldwide. What is most impressive about that announcement is the rate of growth, with the company just hitting the three million customer mark in May of 2024. The company served two million customers at the end of 2022, so the rate of growth is on a steep upward curve. The company currently has over 6,700 working satellites, up from 5,400 at the end of 2023. The company still plans to grow the first-generation constellation to 12,000 satellites. This growth puts the company on track to hit $6.6 billion in revenue for the year, which means the company will be able to internally fund its continued efforts to improve its reusable rockets.

At the end of November, the FCC’s Space Bureau granted the SpaceX application to construct, deploy, and operate a constellation of the next generation of satellites, which the company is calling its Gen2 Starlink constellation. The FCC authorized SpaceX to operate the Gen2 satellites at altitudes of 340, 345, 350, and 360 kilometers. The FCC also gave permission to connect to the new satellites using Ku-, Ka-, E-, and V-band frequencies. Starlink says it still hopes to eventually reach 29,988 Gen2 satellites, up from the 7,500 approved by the FCC so far.

In the application that requested the changes, Starlink said that “small-but-meaningful updates” can boost broadband speeds to 1 Gbps. Starlink’s website says that current actual speeds vary between 25 Mbps and 220 Mbps, with a majority of users experiencing speeds over 100 Mbps. Current upload speeds are typically between 5 and 20 Mbps. Current latency ranges between 25 and 60 milliseconds, with 100+ milliseconds in a few remote locations.

The company says the faster speeds would come from several changes. The company plans to use larger Starlink satellites, which are so big that only Starship can launch them. SpaceX has also requested to lower the altitudes of existing satellites, requesting to lower satellites at 525, 530, 535 kilometers to 475, 480, and 485 kilometers, respectively.” Another request to the FCC would change the elevation angles for satellites operating between 400 and 500 kilometers from 25 degrees to 20. This would increase the connection times to earth stations.

Finally, the FCC approved the request by SpaceX and T-Mobile to offer supplemental mobile coverage from space. The FCC ruling said this “will put an end to mobile dead zones.” For now, the approval extends to basic connection for texts or emergency communications using slices of T-Mobile’s spectrum in areas the mobile carrier’s terrestrial network can’t reach.

There is no guarantee that the FCC will approve everything Starlink is asking for. Companies like AT&T and Verizon have said that some of Starlink’s requests for frequency would interfere with and degrade service from terrestrial mobile networks.

One bit of negative news is that Starlink has reintroduced a wait list in some markets. Is this something that will be relieved as more satellites are launched, or will the rapid customer growth outstrip network capacity. This is the same kind of issue that every ISP that grows quickly faces.

Elon Musk’s close ties to the administration bodes well for the company to get much of its wish list. The company had a very good 2024, and the future looks even brighter.

EchoStar Stays Alive

We are in the midst of what can only be considered as merger mania, a topic I covered in yesterday’s blog. One of the recently announced deals is the announcement that DirecTV is acquiring all video assets of EchoStar, which had just merged with Dish at the beginning of this year. This means that DirecTV will take on all of the Dish video customers along with Sling TV. As part of the merger, DirectTV is also taking on all of EchoStar’s debt.

This means several things for the industry. First, it means there will only be one satellite-based traditional video provider. DirecTV hasn’t said if it will continue to market under the Dish brand name, but the two satellite services will now be one. This will give the company the chance to consolidate and save costs. It also means that DirecTV will have a lot more cable customers and should have more leverage with programmers. Both DirecTV and Dish have been fighting with programmers to allow smaller video packages that people want. You might recall that DirecTV also currently serves the traditional AT&T cable customers.

The other interesting consequence of this is that it saves Charlie Ergen’s launch of Dish, the newest cellular company. Dish had been facing a $2 billion debt maturation next month, and many analysts predicted the company would have to enter bankruptcy. This gives Dish a clean balance sheet for the cellular business and provides the company with up to $5.5 billion in new debt headroom to complete the network and market its cellular services. The merger is not yet a done deal, and various creditors are being asked to take a haircut to help complete the transaction.

The press releases refer to the remaining Cellular company as EchoStar, and we’ll have to see if the cellular business keeps that brand name going forward.

It’s going to be interesting to watch Dish. The company spent $6 billion to meet its build-out commitments to the FCC. It’s estimated it will need a few billion more to meet the next coverage commitments in 2025.

Dish took a big chance on its original network design and pursued an open RAN architecture, which has the goal of using off-the-shelf generic hardware instead of the proprietary gear offered by the handful of industry vendors. The open RAN hardware has taken longer to perfect than hoped for, and the company ended up building a network that is a mix of open RAN and more traditional gear.

Dish has struggled. It acquired Boost Mobile and saw customers drop from 10 million to under 7.5 million. But the company seems poised to start attracting customers to it’s new 5G networks, which are likely wide open. I’ve been looking at the FCC cellular maps a lot lately, and I see Dish is in many markets like around my city, where it likely doesn’t yet have many customers.

It’s interesting how quickly the cellular industry has changed. The FCC required T-Mobile to support the launch of Dish as a term of T-Mobile’s merger with Sprint. At that time, just a few years ago, the FCC felt that the market would suffer without a replacement for Sprint. But since then, the big cable companies are aggressively selling cellular and migrating traffic to their own existing wireline networks. Other large ISPs and telcos other than AT&T and Verizon are exploring the cellular business plan as well.

One of the more interesting possibilities for Dish is to enter the fray in pursuit of FWA cellular broadband customers.

Merger Mania

The industry is suddenly awash with talks of acquisitions and mergers.

In September, Verizon announced the acquisition of Frontier Communications in an all-cash deal valued at $20 billion. The deal was touted for adding Frontier’s fiber customers to Verizon’s base of FiOS customers – which would grow Verizon to approximately 10 million customers.

T-Mobile has announced two acquisitions of fiber overbuilders. The first was the acquisition of Lumos, which has been building fiber in North Carolina, South Carolina, and Virginia. Lumos currently has over 300,000 customers, but T-Mobile said it would continue to invest for the company to grow pass 3.5 million homes by the end of 2028. T-Mobile also announced the purchase of Metronet, a fiber overbuilder from the Midwest that has expanded into 17 states. Metronet currently passes 2 million homes, and T-Mobile says it will invest to grow to 6.5 million fiber passings by the end of 2030.

T-Mobile is also buying Uscellular from TDS for $4.4 billion. This purchase has drawn attention from six Senators who disapprove of the sale.

As I was writing this blog, Bell Canada, a subsidiary of giant BCE, announced it wants to buy Ziply for $3.6 billion. Ziply was formed in 2020 by buying properties in the Pacific Northwest from Frontier.

DirecTV announced recently that it will acquire all of the video assets of EchoStar, which had just merged with Dish at the beginning of this year. This means that DirecTV will take on all of the Dish video customers along with Sling TV. As part of the merger, DirectTV is also taking on all of EchoStar’s debt.

Will not directly broadband, but highly related, Qualcomm has made overtures to buy Intel. This is a particularly interesting offer since a decade ago Intel had looked at buying Qualcomm.

Fierce Network published an article in September that said that 400 fiber ISPs are ripe for acquisition. Assuming that even just fraction of those ISPs are interested, this foretells a lot more coming announcements of industry consolidation. There is an interesting quote in the article. Andrej Danis of AlixPartners said that many fiber overbuilders “will never reach critical mass.”

This is an interesting observation that highlights the difference between how the financial world and investors look at the fiber business compared to many of the ISPs who have built fiber.

Many fiber businesses clearly have the goal of growing large enough to flip to somebody larger. The investors in these businesses are largely venture capitalists who hope to sell companies at a premium multiple of what they paid to build the business. For example, the Lumos deal is reported to be valued at over $9,000 per existing broadband customer – a lot more than what the company spent to build the existing networks.

Almost anybody who owns a fiber ISP is going to be tempted to sell at those kinds of valuations. But there are still a lot of ISPs with a different motivation. Once a broadband network is mature, it turns into cash cow and spins off a lot of cash annually. I know ISPs that have expanded fiber networks strictly for the permanent cash flow that builds long-term family wealth. Such ISPs envision operating networks for many decades to come.

The Trajectory of FWA

In what is bad news for many other ISPs, both T-Mobile and Verizon have plans to continue their aggressive growth of FWA cellular broadband. As a reminder, this is home broadband delivered from cell towers that mostly uses the same spectrum already being used at cell towers for cell service.

AT&T, T-Mobile, and Verizon have had unprecedented success with this new broadband product since it first launched in 2021. The following table shows the growth in FWA so far this year.In the first two quarters of this year, the three carriers added almost 1.8 million customers, while big cable companies lost almost 500,000 customers, and big telcos saw a net gain of under 50,000 net new customers.

AT&T is the newest provider of FWA service and just getting serious about selling the service in 2023. AT&T does not provide FWA everywhere it has cell customers, and strategically uses FWA, mostly in rural markets, as a replacement technology when discontinuing copper service. AT&T continues to be focused on fiber expansion and has passed far more new locations with fiber in recent years than anybody else.

T-Mobile has been the most aggressive in deploying FWA broadband and now has over 6 million customers. T-Mobile says it’s goal is to reach 8 million customers by the end of 2026, which would require a continued growth of 400,000 new customers per quarter. T-Mobile recently announced longer-term plans to reach 12 million customers by the end of 2028 – which would mean stepping up customer acquisition to an average of 500,000 net new customers per quarter.

Verizon recently announced plans for aggressive FWA growth. The company says it will set a goal somewhere between 8 and 9 million customers by the end of 2027. This would mean average growth in the range of 275,000 to 350,000 customers per quarter – slower than the current rate of growth.

T-Mobile currently has over 1 million customers on a waiting list for FWA. Like Verizon, T-Mobile uses excess spectrum capacity at cell sites for FWA. Each company likely has an algorithm for each cell site to calculate the safe number of FWA customers that can be added without degrading cellular broadband service. Both carriers have said that they can’t justify building cell sites strictly for FWA service and only plan to deploy it at current or new cellular cell sites.

Verizon has been increasing FWA speeds in some markets by layering on C-band or millimeter wave spectrum for FWA. The advantage FWA has today is lower prices, but the product become formidable if download speeds can compete with fiber and cable companies.

If the three companies meet their growth goals, they will collectively have almost 20 million broadband customers in 2028 – almost as big as Charter or Comcast today. This growth is by far the biggest disruption of the traditional broadband industry, with FWA growth taking customers away from all other ISPs.

The real key to these growth plans is waiting to see if the public likes the FWA product and doesn’t go back to faster broadband alternatives. Reaching 10 million customers so quickly is impressive and unprecedented in the industry. But it’s no guarantee that they can grow at the same pace to reach 20 million customers.

 

T-Mobile Pursues Fiber

In one of the more interesting fiber transactions of recent years,  T-Mobile announced the acquisition of Metronet, a fiber overbuilder. Metronet is currently owned by Oak Hill Capital, the Cinelli family who founded the company, and KKR, a minority investor. Metronet has been one of the fastest growing fiber overbuilders and has grown to a reported 2 million fiber passings. Metronet has been an aggressive overbuilder and also picked up customers in the 2022 merger with Vexus, an overbuilder from Texas.

T-Mobile will use a mix of debt and equity to invest $4.9 billion to acquire a 50% stake in the business. Subject to regulatory approval of the deal, T-Mobile will take over the customers and the operations of the business. Metronet will focus on expansion plans, network engineering, network deployment, and customer installations.

This acquisition follows T-Mobile’s acquisition of Lumos announced in April. That acquisition brought 320,000 customers and 7,500 route miles of fiber to T-Mobile in the mid-Atlantic area.

T-Mobile expects the acquired companies to be self-supporting, including funding the expansion of fiber. Metronet has announced plans to grow to 6.5 million fiber passings by 2030.

This is an interesting transaction because it represents a major foray into the wireline business by a traditional wireless company. T-Mobile has already been the fastest growing ISP over the last few years as it added almost 5.2 million customers to its FWA cellular wireless product over a few year span. The two fiber overbuilders plus the FWA business will make T-Mobile the fifth largest ISP in the country behind Comcast, Charter, AT&T, and Verizon.

Metronet advertises itself as an affordable alternative to cable company broadband. It’s prices, disregarding introductory specials, offer 100 Mbps for $40 or a gigabit for $60. But Metronet has one of the more unusual hidden fees in the industry, and every broadband product requires a mandatory $13 month additional fee it calls Tech Assurance, which is essentially insurance and “covers any service calls or repairs to all Metronet-owned equipment”.

I’ve written several blogs lately that have speculated that the broadband business is reaching full market penetration, in that households that can afford broadband mostly seem to now have it. That doesn’t mean the industry can’t grow, and companies like Metronet and now T-Mobile believe there is a lot of room to capture customers from the big cable companies. As much as you might hear about how fiber has captured the market, Comcast and Charter still have over half of all broadband customers in the country.

Another interesting dynamic is T-Mobile will offer both fiber and FWA wireless broadband in its acquired markets, meaning it has two alternatives for customers. It might seem like the company is competing against itself, but it’s instead offering two alternatives to win customers from cable companies and other ISPs.

This acquisition also raises the interesting question of whether T-Mobile is done with expansion. A recent op-ed in FierceNetworks speculated that there are some other interesting acquisition targets in the market, including Quantum Fiber (CenturyLink fiber), Ziply, Zayo, and Astound. I haven’t the slightest idea if any of these companies are in play, but any time there is a major acquisition, the speculation game of musical chairs always begins.