T-Mobile told the FCC that it plans to use the spectrum acquired from UScellular to expand its fixed wireless access service to rural markets. It also claims the deal will help it compete with cable operators expanding into mobile services. 

Also read: T-Mobile Pays $4.4 Billion for UScellular’s 4.5 Million Customers and 30% of Its Spectrum … But Regulatory Hurdles Await

T-Mobile is arguing that the FCC should approve its $4.4 billion transaction for UScellular, and about 30% of its licensed spectrum, which was announced in May.

“The transaction will … expand T-Mobile’s fixed wireless service offering and thereby increase competition for in-home broadband services,” T-Mobile said in a heavily redacted public interest statement to the FCC. “This will be particularly important for bringing increased competition and choice to rural areas.”

The missive added, “Cable companies’ entry into the wireless market has been particularly threatening to UScellular.”

Also Read: T-Mobile Fixed Wireless Growth Slows 27% to 406,000 Customers in Q2 as Operator Turns Its Attention to … Fiber-Fueled Convergence

The deal would see T-Mobile acquire all 4 million of UScellular’s customers. UScellular will retain its approximately 4,400 towers and enter new 15-year lease agreements with T-Mobile on about half of them, as well as extend leases on the 600 towers where T-Mobile is already a tenant.

UScellular’s reach includes 4.5 million customers across 21 states, with about 40% of the service base focused in rural areas.

T-Mobile also argued that the purchase would help drive down prices for consumers.

Unfortunately, all relevant metrics were redacted in the filing, which was first noticed by Ted Hearn's PolicyBand newsletter. 

“UScellular’s current rate plans are generally more expensive than comparable rate plans offered by T-Mobile,” T-Mobile wrote to the FCC. “Following the transaction, UScellular customers will have the opportunity to pay the same or less for higher quality service than either UScellular or T-Mobile offers today.”

T-Mobile reported expansion of 406,000 fixed wireless access users in the second quarter, a 27% growth deceleration from the same April to June period of last year. 

The result didn't surprise the investment community, with the wireless company, dating back to its launch of FWA service in 2021, predicting that it will only have network capacity to support 7 million to 8 million 5G Home Internet subscribers through 2025. 

T-Mobile shares were up more than 3% as of this sentence typing.

Currently, T-Mobile’s FWA base stands at 5.587 million customers, which is well past the halfway point of its self-imposed ceiling. 

The rapid proliferation of low-priced fixed wireless access (FWA) services has been a thorn in the side of cable operators, the biggest of which, Comcast and Charter Communications, both lost record numbers of cable broadband customers in Q2.

Also read: Charter Follows Comcast With Worst-Ever Broadband Quarter, Loses 149,000 Subscribers in Q2

But T-Mobile seems to view the FWA business as merely a transition tool, a gateway into the fiber-based home internet business and more broadly, a convergent future of packaging mobile and wireline internet service, just like the rest of its cable and wireless competitors.

Last week, T-Mobile announced it had entered into a joint venture with global investment firm KKR to buy residential fiber infrastructure company Metronet.  This followed T-Mobile's investment of $950 million in April in another joint venture, this one with Swedish investment firm EQT, to buy 50% of fiber network provider Lumos.

The two investments will result in T-Mobile reaching around 10 million homes with fiber by 2030, T-Mobile said Wednesday.

Responding to a question about the company’s “convergence strategy” from analyst Craig Moffett, T-Mobile CEO Mike Sievert said he and his teammates are “not believers” in the phrase “convergence” per se, but he seems to like where the basic concept is headed. 

“That being said, convergence is real in that the customers that buy both buy them together, and we have bundles today,” he added. “Many of our 5.6 million broadband customers today purchase that in a bundle and realize discounts by doing so.”

Also read: Dumb in Dallas? AT&T Keeps Pushing a ‘Convergence’ Advantage It Simply Does Not Have

For his part, Moffett has been critical of AT&T's convergence strategy, noting that since the telecom only has fiber in 12% of U.S. homes, it can’t effectively market a combined offering. 

For the “mathematically inclined,” Moffett noted in a Wednesday morning investor note, 10 million homes passed translates only to around 6% of the U.S. 

“The situation for T-Mobile is worse still. And yet they are plowing ahead undaunted,” he wrote. “Like AT&T, T-Mobile has neither a wireline answer in the vast majority of the country nor a viable path to get one. If the world moves in the direction of convergence — or worse, if they, along with AT&T, help move it there themselves — then T-Mobile will lose everywhere they don’t have a wireline network. Right now, that’s 98% of the country. The muddled strategy around convergence is a pity, because T-Mobile is actually doing very well in mobile, thank you very much.”

T-Mobile reported a 3% year-over-year gain in Q2 total revenue to $19.772 billion.

“We’ve already made abundantly clear how much we dislike T-Mobile’s quixotic mission to cobble together what is destined to be a costly and, ultimately, a largely irrelevant wireline footprint,” Moffett added. “It’s a pity that it distracts from real momentum in their core mobility business, which yet again posted strong results.”

Here’s T-Mobile’s full Q2 earnings release. 

T-Mobile remains the wireless provider with the fastest median 5G internet download speed in the U.S., according to a new report published by Ookla. 

The research company's latest “5G in the U.S.” study found T-Mobile had a peak median download speed on its 5G network of 287.14 megabits per second (Mbps) before a slight drop-off in April and May. 

Verizon similarly peaked in March at 224.67 before dipping. 

As Ookla also notes, Verizon is gaining ground on T-Mobile, even surpassing in in median upload speed. 

Last week, the Advertising Research Federation released more new figures, suggesting that 6% of U.S. households watch video exclusively on mobile devices, a tally that increased by 1 million homes since 2022, the group said. 

Notabaly, according to Ookla, both T-Mobile and Verizon have improved their experience for video and gaming over 5G since last year. 

Ookla lead industry analyst Mark Giles noted: “5G performance in the United States continues to improve as more midband spectrum becomes available. In March, T-Mobile gained access to additional 2.5 GHz spectrum it won at auction 108 in 2022, and we’re already beginning to see the impact of this, adding extra capacity to its 5G network and boosting performance in rural U.S. locations in particular. In just one month, T-Mobile’s median download performance across the U.S. increased by 29.64 Mbps.”

The overall 5G experience does vary state to state, Ookla also said. 

T-Mobile has agreed to pay $4.4 billion to acquire UScellular’s 4.5 million retail wireless customers across 21 states, its retail stores and 30% of its wireless spectrum holdings. 

Around $2 billion worth of the sales price involves the assumption of debt. (You can read the full earnings release here.)

Bellevue, Washington-based UScellular will retain its 2,100 cellular towers, with T-Mobile leasing space on them. T-Mobile will make job offers to a “significant number” of its employees, Light Reading reports. 

The deal fits into T-Mobile’s plan of growing its retail wireless business through acquisition, with the $26 billion purchase of Sprint in 2020 and the recently closed $1.3 billion deal for Mint Mobile factoring in.

Also read: T-Mobile’s $26 Billion Sprint Purchase 4 Years Ago Resulted in Markedly Higher Consumer Pricing on Wireless, Report Says 

But with the Sprint deal currently painted with some revisionist regret on behalf of consumers, who are currently paying more in the U.S. for wireless service in its aftermath, regulatory approval could be dicey. 

Also factor in that T-Mobile's spectrum holdings will exceed the ownership soft cap in certain markets. 

Equity analyst Craig Moffett wrote this Tuesday morning: “Will the FCC and DOJ allow a transaction that will put T-Mobile above the FCC’s spectrum ownership ‘soft cap’ in select markets? We don’t know. But it is clear that spectrum concentration concerns are at the very top of the list of issues that made this transaction take so long to announce. The (negative) read-through for the spectrum market here is obvious.”

New Street Research policy expert Blair Levin, a former FCC official, believes the deal will ultimately be approved. But “given the current antitrust leadership,” he added in his own investor note, “the odds don’t reach the high level of certainly that they would at a prior time.

Nearly 50 months after T-Mobile's controversial $26 billion acquisition of rival U.S. mobile network operator Sprint closed, the worst fears of critics have been realized -- American consumers are paying significantly more each month for wireless service.

In a new report (first reported on in the U.S. by Light Reading), Finland's Rewheel Research claims that wireless markets with only three mobile network operators (MNOs) pay a lot more for wireless service vs. markets with four MNOs, as the U.S. once stood before T-Mobile gobbled up its No. 4 ranked rival. 

For certain plans, Rewheel said that consumers in three-MNO markets pay as much as three times more each month. 

"Five years on, the Sprint/T-Mobile 4-to-3 mobile merger made the U.S. one of the most expensive mobile markets in the world," Rewheel stated. "... After the merger prices in the U.S. either stopped falling altogether or fell at a much slower rate. The 4-to-3 mobile merger in the US led to higher prices and consumer harm."

Part of the Democratic minority on the FCC commission at the time regulators were reviewing T-Mobile's proposed M&A, current chair Jessica Rosenworcel argued to the Justice Department in 2019, "We've all seen what happens when markets become more concentrated after a merger like this one. In the airline industry, it brought us baggage fees and smaller seats. In the pharmaceutical industry, it led to a handful of drug companies raising the prices of lifesaving medications. There's no reason to think this time will be different."

For its part, the DOJ responded by engineering a provision ... that simply hasn't worked out. 

In July 2019, the Justice Department agreed to settle a lawsuit over the merger by requiring T-Mobile and Sprint to divest certain assets, including the Boost Mobile and Virgin Mobile prepaid businesses, that would enable Dish Network to replace Sprint as America's fourth MNO. 

These days, however, Dish and its parent company, EchoStar, appear significantly closer to entering bankruptcy court than they are finishing completion of a nationwide 5G wireless network and operating a full-fledged post-paid wireless business. 

T-Mobile said it is expanding its advertising business, creating an in-store retail media network and adding Plex, the video streaming platform for its footprint of mobile customers.

At its first presentation at the NewFronts Tuesday, T-Mobile said that as one of the biggest advertisers in the U.S. it was in a unique position to build products for marketers. 

“T-Mobile has a simple mission: Be the best in the world at connecting customers to their world,” said Jean-Paul Colaco, the former Hulu and WarnerMedia executive who joined T-Mobile last year as senior VP and chief T-Ads officer. “T-Mobile Advertising Solutions has the unique opportunity to propel the industry forward, delivering more personalized, customer-centric advertising driving higher engagement and superior outcomes for marketers.”

Retail media networks have become a big deal as store owners look to cash in on their shopper traffic and use customer data to help brands target ads and measure campaign results.

T-Mobile said its in-store retail media network will enable advertisers to target more than 20,000 screens in 11,000 T-Mobile and Metro by T-Mobile retail locations. T-Mobile said it plans to expand its retail media network by adding other retailers.

Plex will give T-Mobile reach in the connected TV space. Advertisers will be able to use insights and audience data from T-Ads to target consumers with relevant ads and specialized sponsored experiences, like free movies and series.

Brands will also be able to advertise through T-Mobile’s loyalty programing through the T Life app. 

T-Mobile said its Magenta Advertising Platform gives advertisers tools to drive better outcomes and connect with the right audience on the right screen. The platform is designed to deliver interest-based audience profiles using insights from T-Mobile’s privacy-safe, first-party data. 

T-Mobile said an unnamed food delivery app used T-Mobile's first-party audience data to deliver incremental audiences within an omnichannel video campaign during the Super Bowl, T-Mobile said.

T-Mobile Advertising Solutions identified new audiences, reaching 852,000 incremental households and achieving an 18.6% increase in brand consideration. 

There was also a 23% lift in app re-engagement among inactive users after an ad exposure and a 6% incremental install rate, meaning new users were captured directly via media spending with T-Mobile.

The long-expected deceleration of fixed wireless access (FWA) customer expansion appears to be at hand, with T-Mobile reporting first-quarter customer growth of just 405,000 souls for its 5G Home Internet service, down 22.5% from January - March of 2023. 

T-Mobile ended the quarter with 5.181 million FWA subscribers. 

Earlier this week, Verizon reported its FWA business had slowed customer growth by 10% in Q1 to 354,000 customers. AT&T doubled its FWA ranks by adding 110,000 customers to its Internet Air service, but AT&T is just getting started in what it still describes as a very niche platform aimed mainly at business customers. 

For a business originally built around excess 5G wireless network capacity, FWA was always intended to have limits. T-Mobile has said it would stop growing its fixed wireless ranks once the business accounts for around 5% of its total revenue. T-Mobile said it's goal is to have around 7-8 million FWA customers by 2025, and it remains on pace to achieve that objective. 

T-Mobile and Verizon's entry into the home internet market with cheap cellular-based platforms three years ago is a major reason why both Comcast and Charter Communications keep losing wireline broadband customers every quarter -- the two cable giants were down another 65,000 and 72,000 high-speed internet customers respectively in Q1. 

In his note to investors Friday following Charter's Q1 earnings report, equity analyst Craig Moffett remarked, "With FWA now clearly on the downslope, we believe the headwinds to cable broadband very likely peaked in Q4 of last year."

Moffett also noted that AT&T's fiber-to-the-home business also saw diminished customer growth in the first quarter, down to 252,000 customers from 272,000 a year prior. 

But cable investors shouldn't expect a major growth rebound just yet, he said.

"Under other circumstances, these welcome portents might well have already sparked a significant rally in cable stocks, where broadband competition is virtually all that matters," Moffett added. "But the house on fire for the moment isn’t the competitive threat posed by FTTH or FWA, but instead is the [expiration] of the government's Affordable Connectivity Program subsidy program. Charter leaned into ACP like no other peer, building their ACP sub count to five million. No other operator is close to being as exposed."

T-Mobile, now the fifth largest supplier of home internet in the U.S. with 4.776 million fixed wireless access (FWA) customers as of the end of 2023, is now imposing usage caps on its customers who exceed 1.2 terabytes of data per month.

T-Mobile instituted a "soft cap" on just new Home Internet users in January, threatening to reduce their speeds during periods of high network usage if the customer was over its allotted 1.2 TB. 

"As of January 18, 2024, new T-Mobile Home Internet customers who exceed 1.2TB of data usage for the current billing cycle will be prioritized last on the network," reads the company's internet policy page.

As noted by The Mobile Report (by way of Light Reading), the soft cap has been extended to all users, not just new ones, with T-Mobile now warning in its terms of service that, "During congestion, Home Internet customers may notice speeds lower than other customers and further reduction if using >1.2 TB/mo., due to data prioritization."

According to data released in February by analytics and SaaS provider OpenVault, average home internet data usage for Q4 was 641 gigabytes. Also, 21.6% of users now exceed 1 TB of monthly data usage. 

Introduced in 2021, FWA services from T-Mobile and Verizon have very quickly undercut what had been accelerating pandemic era broadband customer growth for the cable industry, delivering "unlimited" high-speed internet over cellular networks that's cheap, and can be signed up for and cancelled easily. 

T-Mobile is currently offering 5G Home Internet for $40 a month if customers sign up for autopay. 

Their still dominant market share in U.S. home internet dinged but not destroyed, captains of cable industry have adopted a "what me worry?" ethos in regard to the FWA competition. Since the economics of these cheap home internet services are built on excess capacity from mobile networks, they'll stop thriving when that capacity dries up, cable execs say. 

Meanwhile, cable operators are beginning to fight back with low-priced home internet options of their own. On Wednesday, for example, Comcast introduced Now Internet, which delivers 1 megabit-per-second speeds, and unlimited data, for $30 a month. 

For the ninth-consecutive Major League Baseball season, T-Mobile is offering customers a pro baseball season's worth of free access to MBL.TV.

Any T-Mobile customer can claim the deal, valued at $149.99 a season, by visiting T-Mobile by EOD Monday. This season, T-Mobile hopes to build on the record 52 million hours of MLB streaming it delivered on its platform last year.

The wireless company is rolling out a new product feature called  “Secret Baseball Button,” a bluetooth-enabled tool that allows office workers and other customers constrained by "The Man" to watch baseball on the job without risk of being caught by their boss.

According to the company, one click of a button fills an MLB.TV user's screen with a tab that mimics a business-themed video call. Users can toggle right back to the game action with another button-push once the boss is gone. 

While games found in local coverage areas are not included in the plan, the MLB.TV out-of-market games streaming service still offers value for fans looking to watch as much MLB content as possible, including for teams outside their local markets.

"T-Mobile customers love baseball” said Mike Katz, president of marketing, strategy and [products for T-Mobile, in a statement. “So we wanted to do something special this year to ensure they can enjoy their free MLB.TV and all that baseball ... with a simple tap of the Secret Baseball Button.”

On top of free MLB.TV, T-Mobile customers with Magenta Status can also get free access to streaming services like Apple TV Plus, Hulu and Netflix with the company’s bundled deals.

New Street Research equity analyst Jonathan Chaplin responded positively to a Bloomberg report Monday that Charter Communications is in private talks to possibly acquire devalued cable operator Altice USA, saying the two MSOs' regional footprints in New York, Connecticut and Massachusetts and  "would fit well together."

But in a note to investors, Chaplin also said it would be "irresponsible" for Comcast not to also take a look at struggling Altice USA. 

"We would put the probability that Comcast has discussions with Altice at very high. We would put the prospect of a competing bid, if any of this turns out to be true, much lower," Chaplin wrote. 

Also read: Altice USA CEO Dennis Mathew: Struggling Cable Operator Is Learning to Compete Against Fixed Wireless

Chaplin also said it would make sense for T-Mobile to also take a run at Atlice USA, although he doesn't believe the wireless company's counteroffer prospects are as good as the one Comcast could render. (Fierce Wireless and Light Reading first reported on Chaplin's note.)

Altice USA has been trading at only a small fraction of its 2021 peak share price of nearly $40. But shares have spiked nearly 62% since Bloomberg's report. 

None of the aforementioned companies have publicly commented on the M&A reports

“The industrial logic of putting Altice together with Charter or Comcast is powerful," Chaplin wrote. "It is slightly more powerful for Charter than it is for Comcast. The integration costs would be very high for both companies, and both are very aware of these costs. The leverage makes the deal very difficult, given the magnitude of the integration costs.”

During Comcast's Q4 earnings call in January, chief executive Brian Roberts tried to throw cold water on any M&A speculation. 

“While there may be speculation what we could do next, I’d like you to hear it directly from me,” Roberts said. “I love the company we have. So the bar continues to be even higher for us to do anything other than the plan you heard today.” 

Even with advertisers spending, on average, around $7 million to run 30-second commercials during Super Bowl XVIII on CBS Sunday, Charter Communications and T-Mobile continued to ramp up the home internet wars. 

Plying the usual formula of the hapless dad looking for ways to overcome the supposed limitations T-Mobile fixed wireless access, Charter ran a spot called Holes during the big game. 

You can see the ad here:

For its part, T-Mobile -- which added 2.1 million FWA customers last year, making it the fastest growing ISP in America -- continued what is now a Super Bowl tradition, hawking its 5G Home Internet service with the latest in a series of spots re-teaming Scrubs actors Donald Faison and Zach Braff.

On Sunday, with the antagonist referenced as merely "the cable internet guy," action star Jason Momoa made a guest appearance:

T-Mobile said Thursday that it added 541,000 fixed wireless access users in the fourth quarter, and around 2.1 million for the full year, making 2023 its biggest FWA growth year ever. 

T-Mobile has now amassed nearly 4.78 million 5G Home Internet customers since it launched the service in April 2021. (The company's Q4 earnings release is available here.)

Collectively, T-Mobile and Verizon now control nearly 8 million FWA customers, a number that has swelled quickly as FWA pricing has undercut the competition. 

Also read: Verizon Surpasses 3 Million Fixed Wireless Customers With 375K Additions in Q4

However, T-Mobile last week quietly gave up some of its price advantage, bumping up the bills of new FWA customers who don't already take smart phone service from the company to $60 a month ($65 for those who don't do AutoPay).

Pricing for new T-Mobile wireless customers still ranges from $40 - $50 a month, depending on the plan you have (CNET has a good breakdown of the company's 5G Home Internet pricing here.)

T-Mobile is raising prices on home broadband as cable competitors also figure out ways to make wireless/wireline convergence work for them. Charter Communications, for example, is offering 300 Mbps service for $50 a month to its Spectrum Mobile users. 

Meanwhile, there are indicators supporting the cable industry's long-held belief that FWA would eventually bump up against capacity issues. 

On Tuesday, for instance, The Mobile Report noticed that T-Mobile has -- also quietly -- inserted new terms of service mandating that power users who consume more than 1.2 terabytes of data a month will get throttled during moments of network congestion. 

Notably, T-Mobile says this isn't technically "throttling," since users' speeds go back up once peak usage times ebb. 

Also notable: T-Mobile's FWA customers are second in line behind mobile customers for network resources. And with the fixed wireless user base rapidly increasing, this seems to us like a sign that FWA resources are beginning to be spread thin. 

The National Advertising Division has once again slapped the wrists of both top U.S. cable companies, Comcast and Charter Communications, for TV commercials that disparage emerging fixed wireless access (FWA) home internet services from T-Mobile and Verizon. 

On Thursday, the NAD said that it had determined that Comcast made false claims that Verizon 5G Home is “ineffective, slow, unreliable and prone to subpar performance due to congestion” in Stink Eye, a 60-second radio commercial, and Life With Verizon, a 15-second TV spot. (The NAD put out this statement.)

Comcast said in its own statement that it will comply with the NAD's recommendations. 

Earlier, the NAD put out another statement, claiming Charter’s “Game Time” and “Move Out” spots inaccurately disparage T-Mobile 5G Home Internet. 

The NAD said Charter should “discontinue the express claim, ’Whereas 5G Home Internet is known for slow speeds during peak times and unreliable connections.’ ”

Also, the group said Charter should “avoid conveying the message that T-Mobile home internet has a reputation for slow speeds and unreliable connections during peak times.” (The NAD did, however, validate a claim made by research company Ookla that 20% of T-Mobile FWA customers get shorted their listed internet speeds during peak usage hours.)

Charter also agreed to abide by the self-regulatory body's determination. Charter released this statement to Next TV: “Charter will comply with NAD’s recommendations and we welcome NAD’s recognition of our right — with certain modifications — to distinguish our internet service from T-Mobile’s by touting product differences that provide meaningful benefits to consumers.”

T-Mobile and Verizon have attracted more than 7 million customers in just over two years for new super-inexpensive services that tap 5G cellular for home internet use. The two companies now control 6% of U.S. broadband market share, with AT&T just ramping up its FWA service.

Conversely, Comcast and Charter now control the fastest growing consumer wireless services in America.

The whole cats-and-dogs-living-together arrangement is resulting in a lot of wild claims being made in ads.

Last November, or example, Comcast was told by the NAD to take down or modify Xfinity Mobile ads that disparage T-Mobile's wireless service.

That came determination came around the same time that Comcast started running other TV spots accusing T-Mobile of turning its customers into "vampires," with an allegedly congested FWA network that forces users to get their work done in the wee hours. 

T-Mobile continued to swallow big chunks of home internet market share from cable in Q3, with the wireless company adding another 557,000 fixed wireless access customers during the quarter.

It was T-Mobile’s biggest FWA growth quarter so far this year, and it increased the company's fixed wireless subscriber base to 4.24 million users. Customer growth was down narrowly, by 3.6%, over the third quarter of 2022.  

With Verizon Communications reporting 384,000 FWA adds in Q3 on Tuesday, T-Mobile and Verizon now have more than 6.9 million fixed wireless customers between them. Notably, AT&T has also entered the arena, adding 25,000 customers in the third quarter. 

Collectively, cable operators still control around 67% of U.S. home internet subscriptions. But wireless operators touting 5G speeds and discount pricing for home internet service over cellular continue to expand at a time of high-speed internet stagnation for MSOs. 

On Wednesday, however, an end game for FWA became visible. 

T-Mobile has based its FWA business on excess wireless network capacity. And as equity analyst Craig Moffett noted, the company is more than halfway toward reaching its long-term customer guidance for the modestly scoped operation.

T-Mobile president and CEO Mike Sievert said the company continues to look for ways to expand network capacity for FWA. Possible solutions include adding millimeter wave (mmWave) spectrum. 

But don't look for T-Mobile to invest a lot of capital into owning the cable business. Sievert said investments into home broadband “should be capital-light” and  “generally off-balance sheet.” 

For its part, Comcast just started deploying its next-generation network built around full-duplex DOCSIS 4.0 technology, which is capable, out of the gate, of symmetrical speeds of 2 gigabits per second. Comcast and the rest of the U.S. cable industry hope to be offering 10 Gbps speeds over their legacy hybrid fiber-coaxial cables in the near future. 

Q3 cable earnings kick off Thursday morning with Comcast's presentation. 

Just four weeks ago, T-Mobile touted "industry-leading" post-paid net account additions of 299,000 subscribers and post-paid churn of 0.77%, as well as growth in Q2 service revenue, net income and free cash flow. 

And four years ago, as it worked to close its acquisition of Sprint, T-Mobile promised to grow its ranks, not diminish them. 

But on Thursday, the self-described "Un-carrier" announced that it's laying off 5,000 workers, mostly "corporate and back-office staff," with some technology employees included. 

"Today’s changes are all about getting us efficiently focused on a finite set of winning strategies, so that we can continue to out-pace our competitors and have the financial capability to deliver a differentiated network and customer experience to a continually growing customer base, while simultaneously meeting our obligations to our shareholders," T-Mobile CEO Mike Sievert, in a note to staff that was included Thursday in a company 8-K filing to the SEC. 

Within the broader wireless telecommunications industry, T-Mobile's cuts hardly stand out, with AT&T, Verizon and Dish Network, among other wireless companies, also conducting layoffs this year. 

But T-Mobile's execution has sensitivity attached to it based on the declaration made by former CEO John Legere, who in 2019 made the kind of promises you'd typically expect from a telecom executive trying to get the $26.5 billion Sprint M&A  deal approved by regulators.

"This merger is all about creating new, high-quality, high-paying jobs, and the New T-Mobile will be jobs-positive from Day One and every day thereafter," Legere said. 

In April, GeekWire happened to notice that the combined company actually employed 9,000 fewer workers than it did before its two parts were formally combined three years earlier. 

Responding to the pub, a T-Mobile press rep did some top-notch contorting: “We’ve upheld our jobs commitment," the rep declared. 

"Before we merged with Sprint, we said we’d have more employees as a combined company than the two standalone companies would have had on their own without the merger — and we have done just that," the rep added. "The merger has also allowed us to do many things we otherwise would have been unable to do like deliver choice and connectivity for underserved and small markets and rural areas, in addition to creating new businesses and growing our consumer and enterprise businesses — all of which have created thousands of jobs for T-Mobile, as well as our vendors and partners.”

With the cable industry's broadband customer growth still in recession -- Comcast said Thursday that it lost another 19,000 subscribers in the second quarter -- the fixed wireless access business keeps humming along. 

T-Mobile said that it added 509,000 FWA customers in Q2, upping its base to just under 4 million subscribers. The growth rate came in just under the 560,000 subs the wireless company tacked on between April - June last year. 

Verizon, which added 384,000 FWA customers in the second quarter, now has a base of nearly 2.3 million FWA subscribers. 

Fixed wireless access lacks the speed and performance of cable broadband. But with prices for 5G FWA home internet service tiers coming in at around $50 a month, customers are switching over in droves. 

As the wireless business eats into cable's dominant U.S. wireline broadband market share, the cable companies are seeing explosive growth for their MVNO-based mobile services. Q2 marked the seventh consecutive quarter during which Comcast added more than 300,000 Xfinity Mobile service lines. 

For his part, T-Mobile CEO Mike Sievert told equity analysts Thursday that cable operators are stealing market share from providers of pre-paid mobile service, not T-Mobile.

"T-Mobile is winning the switching decisions," he said.

T-Mobile said it added 523,000 fixed wireless access customers in the first quarter, silencing speculation, at least for now, among some analysts that growth of that new residential broadband business is already being undermined by capacity constraints. 

T-Mobile, which added 338,000 FWA subs in Q1 last year, now has a base of 3.2 million FWA customers. 

Further, the wireless company said it is expanding coverage in its 5G network to reach an additional 25 million consumers and wants to reach a total of 300 million U.S. wireless customers by the end of 2023.

It also wants to increase its midband 5G spectrum from a current level of 150MHz to 200MHz by the New Year's Day. 

T-Mobile on Thursday additionally reiterated its commitment to providing enough capacity to support 8 million FWA subscriptions by 2025.

T-Mobile Home Internet slowed its roll just a bit sequentially late last year, adding 524,000 customers in the fourth quarter vs. 578,000 in Q3. Since the technology relies on excess network capacity beyond what is allocated for mobile customers, and is only available in places in T-Mobile's footprint where excess capacity actually exists, at least one equity analysts wondered if the slight slowdown was a sign that T-Mobile FWA was running out of room. 

Last week, the nation's other major FWA provider, Verizon, announced the addition of a quarterly record 393,000 fixed wireless customers in Q1, upping its base to 1.847 million users. 

So, in a span of about two years, low-priced FWA home internet has infiltrated 5 million American homes. 

Comcast, which saw its broadband expansion trickle to 5 million users in Q1, has noticed, based on its latest ad campaign. 

Fixed wireless access home internet services from Verizon and T-Mobile collectively amassed over 4 million customers almost overnight, explosive growth coming as wireline broadband for cable operators came to a screeching stop. 

The puzzlingly consistent response from the leading U.S. MSOs has been dismissive — FWA simply doesn't have the performance or network capacity to register a competitive threat to the “10G” future, top Comcast and Charter Communications executives have said over and over again. 

Also read: Cable Broadband Customer Growth Was Down by Around 500K in Q1 ... but Fixed Wireless Added 500K

A new report on T-Mobile Home Internet, published Monday by equity research firm MoffettNathanson using data provided by Opensignal, seems to support their logic. 

As the Opensignal coverage map of the Seattle area below reveals, T-Mobile has effectively steered FWA signups away from areas with high network congestion. (Notice the lack of white dots in red areas.)

“T-Mobile routinely informs prospective customers that their FWA service is unavailable in certain areas, directing aspiring customers instead to their tightly-managed 'Lite' service that offers very limited aggregate bandwidth,” wrote analyst Craig Moffett. 

On one hand, he noted, T-Mobile is doing a “sensible” job of network management, turning away customers who live in places where its network can’t handle them. 

“At another level, however, it speaks to the capacity question that is everywhere in a discussion of FWA; T-Mobile is clearly aware of the issue and is managing appropriately around it.”

It is perhaps because of this limiting factor that T-Mobile’s $50-a-month Home Internet service over-indexes with rural customers, growing more freely in places where it’s uninhibited by capacity constraints. 

Of the service’s 2.646 million subscribers as of the end of 2022, 54.7% are in urban areas vs. 70.3% of passings, and 21.3% of customers are in rural regions vs. 6.8% of passings. 

Performance has improved marginally since T-Mobile Home Internet launched. T-Mobile’s FAQ has updated the service’s typical download speeds from 35-115 Mbps, when MoffettNathanson first reported on the service a year ago, to 33-182 Mbps. Expected upload speeds remain at 6-23 Mbps.

This comes at a time when cable wireline has reached a baseline of 200 Mbps. 

As the report notes, T-Mobile’s quick FWA growth is marked by limitations, the service expanding rapidly in regions where competition and capacity allow. 

“Our updated Opensignal analysis reveals that the broad patterns of T-Mobile’s FWA service remain remarkably similar to those of a year ago,” Moffett wrote. “Subscribership continues to heavily skew towards rural even as the preponderance of subscribers is sourced from urban and rural areas. Predictably, uptake is much higher in areas with limited fixed-line competition and is especially in areas with only DSL. And subscribership remains almost entirely confined to zip codes where T-Mobile’s network has sufficient capacity to handle the traffic, precisely as one would expect for a capably managed network.”

Are those limitations starting to reveal themselves in slowing subscriber growth?

Just hours after announcing his retirement as President of Technology for T-Mobile following a 23-year stint at the wireless carrier, Neville Ray had to go into crisis mode Monday evening, as the company dealt with a national service outage affecting customers from New York to California. 

At one point Monday evening, Down Detector counted over 80,000 T-Mobile network problem reports, with many users reporting no cellular network connection whatsoever. Users also took to Reddit to report problems. 

"Our teams are rapidly addressing a 3rd party fiber interruption issue that has intermittently impacted some voice, messaging and data services in several areas. The situation is improving and we hope to have a full resolution very soon. We apologize for any disruption caused," Ray tweeted on Monday. 

Ray later tweeted again saying network performance was stabilizing.

Earlier on Monday, T-Mobile announced Ray's departure, which is set for the fall. He'll be replaced by current Chief Network Officer Ulf Ewaldsson.  

“There are so many things Neville has contributed to this company, but one of the most important has been his commitment to building the best, most effective technology team in this industry that will continue to deliver for our future," T-Mobile CEO Mike Sievert said in a statment. "Neville and his team have worked tirelessly to bring the Un-carrier from last to best in network performance and made T-Mobile’s network a true competitive weapon."

T-Mobile added 524,000 fixed wireless access customers in the fourth quarter, upping its base to 2.65 million subscribers for its still relatively new home internet product after just two years in the market. 

Combined with Verizon Communications’s 1.45 million FWA customers, the two wireless giants have captured nearly 3% of U.S. home internet market share with what are still nascent services. Most of the growth has happened over the last 12 months, with T-Mobile tacking on nearly 1.7 FWA customers in 2022. 

That's the good news for T-Mobile.

Not so good is that FWA's previously explosive expansion slowed a bit in the fourth quarter, dropping from 578,000 additions in Q3. 

“While T-Mobile continues to show strong growth in fixed wireless, the rate of acceleration has clearly slowed," noted analyst Craig Moffett in a Wednesday morning note. "This matches our long-held expectation. We suspect that there remains a long runway for FWA in rural markets, but its application in urban and suburban can be expected to be limited by capacity constraints.”

Cable operators, who have seen their wireline broadband customer growth stall amid FWA’s sudden emergence, have stated all along that while 5G fixed wireless access services are indeed undercutting them, the speed and capacity of wireless networks won't be able to keep up with good ol’-fashioned DOCSIS cable once these FWA services get to scale. 

There's also the issue of radio interference from large buildings, etc., etc. 

Overall, analysts reacted favorably to T-Mobile's Q4 earnings, with Moffett adding: “T-Mobile’s 2023 subscriber guidance starts precisely where their 2022 guidance started, with an expected gain of 5.0 to 5.5M post-paid net adds. Their cash EBITDA guidance for 2023 calls for approximately a 10% YoY improvement. And their guidance for 2023 implies roughly 75% YoY free cash flow growth.”

Service revenue hit all-time highs of $15.5 billion for the fourth quarter and $61.3 billion for all of 2022. 

You can read T-Mobile's earnings release here.  ▪️

T-Mobile has the fastest growing home internet solution in America right now, with its 5G fixed wireless service taking on 578,000 customers in the third quarter alone and quickly amassing a base of over 2.1 million users in just over a year. 

According to T-Mobile CEO Neville Ray, the entire enterprise is based on "fallow capacity" -- network wherewithal that's not already being tapped by the wireless company's mobile users. 

Also read: Fixed Wireless Access Gets Put to the Test in Major Markets - Why 'Middle of the Pack' Looks Good Enough to Us

“The incremental cost of serving those customers is de minimis," Ray said Wednesday, speaking at the Morgan Stanley European Technology, Media & Telecom Conference. (A transcript provided by Seeking Alpha). "And why would you sit on your hands on all of that capacity that you have no utilization for or line of sight to use? So, we've created a huge business in the space, which is just -- it's gone way better than we'd anticipated.”

So the cable industry, which has watched its share prices crater as its once-incendiary collective broadband growth has come to a screeching halt, is being taken to the woodshed by a wireless industry that's merely utilizing spare network capacity that's lying around?

Damn...  

T-Mobile is looking to have as many as 8 million FWA customers by 2025. Ray said that T-Mobile makes "protecting our mobile" a priority vs. having to compete for network resources with FWA. But at that larger scale, that could become challenging. 

With that in mind, Ray seemed to confirm recent speculation in wireless technology pubs that T-Mobile is looking to possibly exploit its prior investment into millimeter wave (mmWave) spectrum to create an "overlay" network in order to serve two masters at once. 

“Are there capabilities? Can we almost dumb down the radio environment and leverage, for example, millimeter wave to stretch the bounds of propagation there, work on CPE, the customer premise equipment and create a robust link for home broadband services there?” Ray asked. 

At that point, T-Mobile would find itself making an actual capacity investment into its FWA business. But if it were to keep right on growing the way it has been, the opportunity might be worthwhile. 

“Are there going to be opportunities for us to expand that business in different ways? We'll see,” Ray added. 

Fixed Wireless Access services from T-Mobile and Verizon added a combined 920,000 home internet customers in the third quarter, driving a rather sudden and dramatic sea change in the U.S. broadband industry, according to new quarterly data published this week by Leichtman Research Group.

In fact, these economy-priced, 5G-powered FWA services led the broader U.S. high-speed internet (HSI) industry to growth at a time when the cable industry has virtually stopped adding high-speed internet subscribers, and losses of DSL and other legacy-tech-based services aren't being offset by additions of new fiber-to-the-home customers for telco wireline operators. 

Also read: Fixed Wireless Access Gets Put to the Test in Major Markets - Why 'Middle of the Pack' Looks Good Enough to Us

Year over year, T-Mobile have added nearly 2.6 million FWA customers. Since the end of the third quarter of 2021, the top seven U.S. cable operators have lost around 400,000  HSI customers, while the top seven telco companies have bled around 700,000 customers from their home internet ranks. 

“Over the past year, fixed wireless services have accounted for nearly 80% of the approximately 3,260,000 net broadband additions," said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc. 

What's perhaps so surprising is how fast the shift has come. The top MSOs added only around 39,000 HSI customers in the third quarter, with narrow gains by Comcast and Charter offset by losses at Altice USA. In the third quarter of 2021, these same cable operators added a combined 592,400 broadband customers. In the pandemic-influenced Q3 of 2020, they tacked on over 1.3 million customers in just three months. 

Wireline telcos, meanwhile, added 550,000 customers to newer fiber-to-the-home services in Q3, but these losses were offset by attrition of 685,000 subscribers to non-fiber HSI services. 

In total, non-FWA services lost nearly 100,000 customers from July - September. ■

In the latest round of ultimate fighting, broadband wireless advertising edition, score one for T-Mobile.

The National Advertising Division (NAD) of BBB National Programs, the ad self-regulatory review body, has advised Comcast to modify or drop comparative wireless savings claims it makes in an ad for its Xfinity Mobile service. Comcast says it will comply with that and other NAD recommendations, which are to drop or modify its "Unlimited data for $30/line" claim in the ad and modify the ad to make sure consumers don't think Infinity is less expensive than T-Mobile "regardless of how many mobile lines are purchased" or, specifically, that it is cheaper when four mobile lines are purchased. T-Mobile had challenged the ad claims.

The ad was featured in a print mailer, an online (Google), and on TV featuring singer Becky G and animated characters from The Bad Guys film.

Also: Cox's 'Gig Speeds Everywhere' Ad Upheld

One issue NAD had with the $30-per-Line claim was that it was subject to throttling after 20 GB of use, which NAD said was not clear in the Google ad. Neither, it said, was the fact that the price is only available to Xfinity Mobile customers who are also subs of Comcast's Xfinity wired broadband service.

In its response to the decision, Comcast said it "agrees to comply with NAD's recommendations," though it did not say whether that would be modifying or discontinuing. "It also said it appreciated that NAD hewed to the FTC's .com disclosures guidance regarding search engine ads and space-constrained ads.

Broadband companies regularly challenge each other's ad claims before NAD.

Back In August, T-Mobile agreed to drop a home internet price claim that NAD said was unsupported, though in that case T-Mobile said it did not agree with the decision. ■

“Human sacrifice, dogs and cats living together … mass hysteria!” 

Dr. Peter Venkman, famously played by Bill Murray in the 1984 film comedy Ghostbusters, could have just as easily been talking about the state of the current U.S. telecommunications industry. 

Cable companies are now wireless operators, with Comcast having its most customer additions ever in the third quarter for its five-year-old Xfinity Mobile service and surpassing 5 million service lines. 

And wireless companies are now seriously eating into the dominant market share long enjoyed by cable in-home broadband. T-Mobile on Thursday announced the addition of 578,000 high-speed internet customers in the third quarter, most of them using 5G fixed wireless access (FWA) technology. 

That follows Verizon's report last week of its best-ever quarterly FWA growth, tacking on 342,000 subscribers in Q3. 

T-Mobile’s “5G Home Internet” service is priced at $50 a month, severely undercutting competition from incumbent cable operators. 

Cable operators, which saw their residential and customer broadband ranks swell mightily amid the pandemic, are mostly flat in terms of subscriber growth these days. 

Comcast, which didn’t add any broadband users in the second quarter, reported narrow gains of 10,000 residential internet customers and 5,000 business subscribers. Charter announced the addition of 61,000 residential broadband users Friday in Q3, reversing a loss of 42,000 last quarter. 

Largely because of their flat broadband growth, Wall Street has hammered both of the top two U.S. cable companies this year. Comcast spiked Thursday after it largely met equity analyst guidance on revenue and other key metrics. But overall, since the beginning of 2022, its stock is down around 40%. 

Charter is up over 4% on the Nasdaq Friday after its morning Q3 earnings report, but it's also down around 40% since the beginning of the year. 

Also read: Cable Broadband Customer Growth Was Down by Around 500K in Q1 ... but Fixed Wireless Added 500K 

Cable executives have largely dismissed the competitive threat posed by FWA, noting that wireless networks don't offer the capacity and performance needed to effectively service a mass user base once scale gets a lot bigger. 

Of course, in a recession, charging a monthly premium of $20 or more to customers makes that a harder sell. 

Still, on Thursday, during Comcast’s Q3 earnings call, Comcast Cable CEO Dave Watson largely maintained the industry posture. 

”There hasn’t been a notable shift in the competitive environment from either fiber or fixed wireless,” Watson told equity analysts. “It’s almost three years since we’ve competed against those early launches in fixed wireless. ... We take it seriously ... Our goal and the game plan is to focus on our ubiquitous network advantage that we have, not looking at our competitors so often at a very local level have to make trade-offs on their network decisions.” 

Watson said that ultimately, cable’s transition to next-generation “10G” networks — a marketing umbrella that includes multi-gigabit DOCSIS 4.0 technology — will sway momentum back to the cable industry. 

“Our DOCSIS 4.0 game plan is a very robust one,” he said. “It puts us in position to deliver capacity and speeds on every application that's out there. Our goal has always been to develop a better product and deliver it. That’s very different from our competitors, where you just add value, and now including mobile. But we just have a different broadband product that's better in terms of overall speed and coverage and Wi-Fi.” ▪️

Comcast has clearly moved beyond its previous strategy of dismissing fixed wireless access (FWA) home internet as a competitive threat.

A new TV ad produced by Comcast’s ad agency, Goodby, Silverstein & Partners, features a family of four in group therapy. The family laments how their T-Mobile FWA home internet service doesn't have enough broadband during the day, forcing them into a “nocturnal” lifestyle pattern … thus turning them into ”vampires.” 

You can now see the commercial via iSpot.tv here.

Comcast has also debuted a new landing page in which it describes FWA as not performing well amid storms, or near cars or tall buildings. The page also says that T-Mobile “plays favorites,” prioritizing network resources to unlimited wireless customers. 

“We’ve seen the spot, and we’re flattered,” Mike Katz, T-Mobile’s chief marketing officer, said in a statement provided to Light Reading, which first reported on the Comcast campaign. “Because of Comcast, millions more people now know they can get home broadband from T-Mobile. And millions across the country can finally drop Big Internet — just like half of our current customers who left Big Cable to join T-Mobile.”

On Monday, Comcast also announced free speed increases impacting over 20 million of its more than 32 million broadband subscribers. 

Comcast experienced flat broadband subscriber growth in the second quarter as T-Mobile reported 560,000 FWA subscriber additions. ▪️

Fixed Wireless Access subscriber additions are expected to rise sharply in the next two years, according to MoffettNathanson senior analyst Craig Moffett, but then moderate in later years, as its rural base begins to saturate.

In a series of slides posted on its website, MoffettNathanson predicted that T-Mobile and Verizon will add 2 million and 1 million FWA customers, respectively, in 2022 and 2023, up from 546,000 and 173,000 in 2021. But that growth is expected to begin to trail off in 2024, to 1.3 million for T-Mobile and 700,000 for Verizon, falling further by 2025 to 500,000 additions for each company, according to Moffett. By 2026, Moffett predicts T-Mobile will add about 200,000 FWA subscribers and Verizon 400,000 FWA customers, according to the report. 

T-Mobile added 565,000 FWA customers in Q2 2022, soundly beating analysts’ estimates, and is expected to finish the year with more than 2 million fixed wireless customers. The company has said it expects to have between 7 million and 8 million FWA customers by 2025. 

Moffett’s predictions are slightly less aggressive than some analysts who have estimated that fixed wireless could add as many as 10 million additional subscribers by 2027, but they’re not that far off. According to his estimates, T-Mobile and Verizon would add a collective 9.6 million additional FWA customers by the end of 2026. 

Though FWA appears to be a viable alternative to cable broadband, Moffett and other analysts have warned, it has mainly been deployed in rural areas and attracted residential and business customers not targeted by wired service. For example, fixed wireless has been extremely popular with construction trailers and food trucks, business customers that aren’t able to receive wired service.

That appears to be backed up by an earlier MoffettNathanson report, which cited estimates from Boston-based market researcher Comlinkdata that 33% of T-Mobile’s broadband customers are in rural areas, representing just 6% of the company’s total homes passed. In addition, Comlinkdata estimated that 88% of T-Mobile’s FWA customers are coming from the 36% of its network that is underutilized.

Looking Beyond Rural Markets

At the Goldman Sachs Communacopia conference earlier this month, Verizon CEO Hans Vestberg said the company plans to expand the service beyond rural markets.

“[W]e’re going to open up new opportunities outside the suburban, out of rural as well, where it's even greater opportunities for us,” Vestberg said of FWA at the Goldman conference. “Our devices coming out on fixed wireless access will basically cover all the frequencies we have, all the way from millimeter wave, C-band and 4G low-band, which is going to make this product enormously great.” 

Cable operators have been keeping an eye on fixed-wireless competition, but have in the past dismissed the service as inferior to wired broadband. But as their own cable broadband subscriber growth has slowed considerably, they are at least giving some credit to the service. 

At the Bank of America Securities conference earlier in September, Charter Communications chief financial officer Jessica Fischer acknowledged that fixed wireless played a role, albeit small, in its Q2 subscriber declines. Later at the BofA conference, Comcast deputy chief financial officer Jason Armstrong said that although fixed wireless is seeing gains, he is most concerned about fiber competition. 

Also: Wireless Connectivity Will Determine Winners in Broadband, Streaming Race, Rutledge Says 

Even other telcos have joined in on the fixed-wireless bashing. Frontier Communications CEO Nick Jeffery said at the Communacopia conference that comparing fixed wireless to fiber was like “comparing a Ferrari to a horse.”

According to Moffett, telcos and cable service providers should worry more about fiber. Planned fiber to the home passings more than doubled in 2021 to 4.2 million from 1.9 million in 2020, and he predicts that they should nearly double again to 7.8 million passings by 2022. He added that planned fiber passings will rise to 9.4 million in 2023, 9 million in 2024 and 8.3 million in 2025. Most of those gains will come from projects from three carriers: AT&T, Lumen (with Apollo Global) and Frontier. Moffett estimates that AT&T will add 4,000 fiber passings in 2022, 3.75 million in 2023, 3.25 million in 2024 and 2.6 million in 2025. Lumen is expected to add 1 million, 2.4 million, 2.5 million and 2.5 million passings in the same time frame, while Frontier should add 1 million, 1.5 million, 1.6 million and 1.6 million, according to Moffett.

But those deployments are not without risks, mostly on the cost side, where labor and equipment expenditures are expected to rise, Moffett wrote. As providers build out in less populated areas the cost per home passed will also increase, as well as capital costs due to inflation and a “higher equity risk premium,” Moffett wrote. ■ 

Charter Communications chief financial officer Jessica Fischer kind of acknowledged the impact of fixed wireless access competition on broadband subscriber growth Wednesday, telling the audience at an industry conference he technology was one of four factors that led to the cable operator’s first-ever broadband customer loss in Q2.

Charter lost about 21,000 broadband customers in the second quarter, one of several cable operators that experienced actual declines in that segment after months of slow growth. According to Leichtman Research Group, cable operators lost about 60,000 broadband customers in Q2.  Analysts had been predicting a slowdown in broadband subscriptions for months, but didn’t expect growth to go negative so soon. 

At the Bank of America Securities Media, Communications & Entertainment conference Wednesday, Fischer said Q2 performance was impacted by four factors: sluggish new home growth, seasonality, fixed wireless competition, and fiber overbuilds.

"I think we have to acknowledge that there is a new competitor in the market in the form of fixed wireless," Fischer said. 

Fischer was quick to clarify that the impact from fixed wireless was more due to customers who may have chosen Charter broadband had FWA technology not been available, rather than existing Charter customers switching providers. And she said she doesn’t anticipate that impact to last long. 

“We expect those customers to come back to us over the long term,” Fischer said. 

Also: Fixed Wireless Will Temper Q1 Broadband Slowdown, Analyst Says 

But the fact that a senior cable executive has actually acknowledged the impact of fixed wireless service on their own wireline offerings is kind of a big deal. In the past, most top cable executives have dismissed the technology as either targeting customers cable has ignored — food trucks and such — or that it has had little to no impact at all. 

In July, Comcast chairman and CEO Brian Roberts, after the company reported flat Q2 broadband growth, was a little less dismissive of fixed wireless’ effect than he had been in the past, adding that although the technology “had no discernible impact” on Q2 performance, its early growth appeared to be a contributor to lower connect activity. But he still stressed that FWA is a poor substitute for cable broadband, with slower speeds and less reliability.  

Also: Fixed Wireless Could Add 10 Million Subscribers by 2027, Analyst Says  

Fixed wireless has been available for a while, but the service has been hampered in the past by slow speeds — while the technology is capable of reaching up to 1 Gigabit per second, most offerings are in the 5 Megabit per second to 50 Mbps range, according to BroadbandNow. That compares to top speeds of 10 Gbps for cable, with some companies offering minimum speeds of 300 Mbps. While 5G has increased speeds and reliability for FWA service — T-Mobile, which added about 565,000 FWA customers in Q2, claims typical fixed wireless speeds of 33 Mbps to182 Mbps — it still lags cable broadband, a fact Fischer believes will keep cable in the high-speed driver seat for at least a while.

Also: Cable’s Broadband Slowdown: Saturation or Share Loss?

“It might be a more robust offering than the offerings that have previously been available in terms of fixed wireless,” Fischer said of 5G, “but in terms of speed and reliability, sort of being able to consistently deliver broadband speeds to customer  in a way that is going to meet the needs of the market, I think it’s still not there.”

Fischer said offering competitive fixed wireless requires the construction of a lot of fiber between radio sites, something she hasn’t seen a lot of telcos committing to. 

“The best wireless networks have a lot of wires,” she said. “As a sale of additional capacity on their networks that works temporarily, I think it’s fine. In the long term, I think that those customers end up being our customers.” ■

As expected, T-Mobile was the biggest bidder by a huge margin in the Federal Communications Commission’s just-concluded 2.5-GHz auction.

The carrier’s gross winning bids totaled $304,325,290 for the vast majority of licenses — 7,156 of the 8,017 up for bid, with the other licenses drawing no bids.

The licenses can be used for any terrestrial fixed or mobile service and have buildout requirements of signal coverage of 50% of the license area within four years and 80% within eight years.

T-Mobile was expected to be the primary major player in the auction since the spectrum fits with holes it has in its coverage areas. One veteran spectrum watcher said likely the only reason most other carriers would be bidding was to bid up how much their competitor, T-Mobile, would have to pay to fill those holes.

There were no other big-name winners, with the second-most licenses won (107) by the North American Catholic Educational Programming Foundation and the second gross bid total recorded by PTI Pacifica Inc.

The auction's gross bid total of $427 million will be reduced by quite a bit, as more than three-quarters of the winning bidders qualified for millions of dollars in small business bidding credits applied to their winning prices.

There are 63 winning bidders, 77% of which qualified as small businesses or as entities serving rural ares that will support the introduction of innovative new wireless services in their local communities. In addition, Auction 108 raised gross proceeds exceeding $427 million. 

The FCC voted back in 2019 to free up the band reserved for Educational Broadband Service (EBS) service for 5G, the most likely flexible use. Educational users with the licenses can continue to use it or lease it to others (as many have already been doing), transfer it to someone else, or use it for something else. ▪️

In the competitive business of unlimited wireless, entertainment bundles matter, and T-Mobile has added another key compliment with the addition of permanent free Apple TV Plus service for its premium "Magenta Plus" customers. 

T-Mobile was already offering these subscribers Apple TV Plus free for one year. Starting on August 31, these subscriber will have free access to Apple's $4.99-a-month SVOD service for as long as they stay on their T-Mobile Magenta Plus plan. 

Meanwhile, subscribers to the slightly cheaper "Magenta" plan will gain access to T-Mobile's "Apple TV Plus on Us" promotion for six months. 

Magenta Plus users have already enjoyed free Netflix Standard Plan service (a $15.49-a-month value) for some time, with Magenta customers getting the $9.99-a-month Netflix "Basic" plan.

Notably, Magenta Plus users also get a year's free of Paramount Plus ($4.99), in addition to 4K/UHD streaming quality. 

In terms of rival U.S. carriers, Verizon offers its premium unlimited wireless users the Disney Bundle for free, in addition to Apple Arcade and Apple Music. 

AT&T stopped bundling HBO Max with its unlimited plans earlier this summer. However, HBO Max's new parent, Warner Bros. Discovery, recently said it had reached a deal to restore service to AT&T wireless customers soon. 

It looks like the FCC's 2.5 GHz midband spectrum auction is drawing to a close. At press time Friday, as of round 69, for all but two licenses with bids demand was equal to supply, with 145 licenses with no bidders.

When there is no demand that exceeds supply, the auction closes. 

The FCC was speeding the process along having moved to a six-round Schedule on Friday (Aug. 26) and shortening the rounds to one-half hour.

Also: FCC Auction Nears $400 Million in Bids

Gross proceeds as of round 69 were $426,086,670. The total was nothing like the eye-popping totals for some of the FCC's past auctions.

T-Mobile was expected to be the primary major player in the auction since the spectrum fits with holes it has in its coverage areas. One veteran spectrum watcher said likely the only reason most other carriers would be bidding was to bid up how much their competitor, T-Mobile, would have to pay to fill those holes.

It will certainly be news if T-Mobile is not the big license winner in this auction.

The FCC is auctioning about 8,000 county-based, flexible-use licenses for spectrum in the 2.5 GHz band, which had previously been reserved for educational broadband services (EBS) that flexible use likely to be for 5G but will now be shared.

FCC to Free up 2.5 GHZ

The FCC voted back in 2019 to free up the band for 5G. Educational users with the licenses can continue to use it or lease it to others (as many have already been doing), transfer it to someone else, or use it for something else. 

EBS, formerly Instructional Television Fixed Service, or ITFS, was used in the 1960s for closed-circuit broadcasts to educational institutions, but was rebooted in the early 2000s and pointed toward broadband.

The FCC has been under pressure to get moving on more midband--5G sweet-spot spectrum because of its propagation characteristics--a box the 2.5 GHz auction item checks off.

Verizon Communications shares dipped more than 3% Thursday after MoffettNathanson downgraded the stock to "underperform" from "market perform," and lowered his 12-month price target on the stock to $41 from $55 each, adding that the company is losing ground to lower pricing from AT&T, better 5G networks from T-Mobile, and the increasing threat of cable wireless. 

Verizon stock was priced as low as $43.91 in early trading August 18, down 3.2% or $1.13 per share, after MoffettNathanson senior analyst Craig Moffett wrote that two years after AT&T started its aggressive pricing strategy, Verizon has "seesawed between periods of promotionality and financial restraint, optimizing neither. They have recently pulled back sharply on promotions, a reversal of their approach in Q2, and have introduced a suite of lower priced plans instead. There are no easy answers."

Verizon shares closed at $44.19 each on August 18, down 2.5% or $1.15 per share. 

At the same time, Verizon appears to be losing the battle with T-Mobile, which still has the lowest pricing in the industry despite spending heavily to build out its 5G network. T-Mobile now has the largest 5G network in the country, a crown that used to be worn by Verizon.

Adding to the pressure is the emergence of cable wireless. Moffett noted that Comcast, Charter Communications and Altice USA added a combined 694,000 wireless customers in Q2, about 100,000 customers more than in the same period last year. Cable now accounts for more than 9 million wireless customers, still only about 3% of the market, but it is growing. And recently Cox Communications said it was beta testing its own wireless MVNO, which Moffett wrote "will only add to the pressure on the incumbents."

Also: Analyst Says it's Time to Take Cable Wireless Seriously 

Moffett's outlook isn't much better for AT&T. While the analyst maintained his "market perform" rating on the stock, he lowered his 12-month price target to $17 per share from $19 because of lower growth expectations. But Moffett raised his price target on T-Mobile to $174 each from $165, citing its strong growth prospects. ■

An advertising self-regulatory body has told T-Mobile's home internet service it should stop making the implied claim in its TV commercial that consumers can save 50% over the price of cable broadband and other home internet competitors and T-Mobile has agreed, though says it does not agree with the National Advertising Division (NAD) of BBB National Programs' conclusion the claim is off base.

NAD said it had determined that the “Up to 50%” savings claim is unsupported because few consumers are paying the $105 a month that T-Mobile uses as its basis for comparison from the FCC’s benchmark rates and that the benchmark, rather than an average price but a public policy metric "set by the FCC to ensure equitable pricing for rural areas."

It said that while the ad implies that consumers can save up to 50% if they buy T-Mobile home internet versus competitors, including Charter, T-Mobile "did not demonstrate that consumers switching to T-HINT will realize such savings."

Also: NAD Says Comcast Should Drop Unsupported Ad Claims

According to NAD, T-Mobile said it would agree to comply because it was committed to the self-regulatory process, but that it disagreed with "certain" NAD findings about the FCC rate benchmark.

NAD said T-Mobile's TV ad had had provided a reasonable basis for the implied claim that its home internet (T-HINT) service was available "broadly" nationwide.

Broadband speed and service claims have been the subject of numerous NAD complaints among broadband and cable competitors, including Charter, Comcast, T-Mobile, Verizon and AT&T. ■

As the cable industry debates, deliberates and denies the impact of fixed wireless access on its suddenly stalled broadband subscriber growth, top U.S. MSOs continue to expand its own encroachment on wireless turf, as well. 

Comcast, Charter Communications and -- to a more nascent extent -- Altice USA, collectively added nearly 700,000 wireless customers in the second quarter, matching their Q1 mobile growth performance.

Together these three tier 1 U.S. cable operators now have 9.2 million mobile lines between them. 

And their being followed into the mobile fray by what one wireless analyst has termed "junior cable" -- privately held Cox Communications, WideOpenWest (WOW) and -- possibly -- Mediacom will soon enter the wireless market in "phase 2" of cable's mobile expansion. 

According to Jeff Moore, who runs Wave7 Research, it's been the collective weight of the cable industry, not the nascent 5G building efforts of Dish Network, that has replaced swallowed-up Sprint as the nation's No. 4 wireless carrier. 

Beyond that, NCTC CEO Lou Borrelli told Next TV in June that his cooperative is now aggressively involved with negotiating wholesale "MVNO" network lease deals with wireless companies on behalf of its some its more than 700 member cable operators, who he said have become interested in mobile very quickly upon seeing the quick growth experienced by Comcast and Charter. 

The growing influence of cable in the U.S. mobile industry  creates an interesting narrative of competitive juxtaposition, with T-Mobile and Verizon collectively adding 800,000 fixed wireless access customers in Q2, while Comcast and Charter flatlined on fixed high-speed internet expansion. 

But this modern telecom-centric retelling of the ol' East Coast vs. West Coast rivalry is deceiving. 

Both Comcast and Charter have built, largely in partnership, their respective Xfinity Mobile and Spectrum Mobile businesses on the backs of an MVNO deal with Verizon, while Altice USA recently established a new MVNO arrangement with T-Mobile. 

These cable mobile operations are designed to heavily tap into the Wi-Fi resources provided by the MSO's fixed broadband networks, but there's still significant reliance on the MVNO partner -- so the more MVNO customers Verizon and T-Mobile have, the more they benefit. 

According to information compiled by Recon Analytics Data (via FierceWireless), 27% of Xfinity Mobile and Spectrum Mobile customers acquired in July were Verizon defectors. 

But Verizon is earning $13.13 a month from MVNO partnerships that not only include Comcast and Charter, but myriad other wireless providers, including  US Mobile, Red Pocket Mobile, Lively and Affinity Cellular. Since Verizon doesn't have to market to those customers and support the subscriber relationship, it actually makes more money on the MVNO customers, Recon said. 

Conversely, not only do top cable executives, including Comcast Chief Executive Brian Roberts, continue to dismiss the capacity of wireless networks to be able to compete with cable at scale over time, Recon also said that many of the 2.1 million FWA customers acquired by T-Mobile and Verizon so far have been new fixed high-speed internet subscribers, not cable defectors.

"It's not a zero sum game," Recond founder Roger Entner said. 

Cable One reported Q2 results on Thursday, missing analysts’ consensus targets for broadband subscriber growth, as one influential analyst believes its problems may only be beginning.

Cable One added 1,300 residential broadband customers in Q2, soundly missing analysts’ consensus estimates of 5,200 additions. While some analysts wrote off the miss as part of the overall decline in broadband growth the rest of the industry is experiencing -- the top three publicly traded cable operators either reported flat or negative broadband customer growth in Q2 -- MoffettNathanson senior analyst Craig Moffett feared it could be a sign of stiffer competition from fixed wireless access providers. 

Cable One, like the rest of the cable industry, has seen its stock price slip this year. As of Thursday (August 4), Cable One shares were down about 18% for the year to $1,441.80 each. On Friday (August 5), the stock slipped another 5% to $1,368.19 per share in early trading.  

Also: Analyst Says Telcos Better Positioned to Chip Away at Cable's Broadband Lead 

But even through that difficulty, Cable One has enjoyed one of the strongest trading multiples in the cable business. Cable One stock was trading at a 37% premium to Charter Communications on August 4 -- mainly because its largely rural footprint was free from serious fiber broadband competition and its relatively low market penetrations meant it had a long runway for growth. In a research note on August 4, Moffett noted that those days may be over as fixed wireless offerings take hold. 

“Fixed wireless has found its greatest success in rural markets, where the market is underserved and price sensitive, and when carriers tend to have excess capacity,” Moffett wrote. “Cable One’s broadband growth has slowed along with everyone else’s, and they may now arguably face more competition than peers, at least from FWA.”

Fixed wireless growth has been strong in Q2, with T-Mobile adding 560,000 FWA customers in the period, well above analysts expectations, and Verizon adding about 256,000 FWA subscribers. T-Mobile overlaps between 40% and 50% of Cable One’s footprint, according to Wells Fargo Securities media analyst Steven Cahall, but the company said it hasn’t seen much of an increase in FWA competition so far. 

In a conference call with analysts Thursday, Cable One CEO Julie Laulis said that T-Mobile hasn’t had much of an impact on Cable One, adding that it appears that most of T-Mobile’s additions in Cable One’s footprint are former telco digital subscriber line customers. Verizon’s impact, she said, has been “virtually nothing.”

“Overlap does not take into account network quality/capacity, which we think accounts for the difference here,” Cahall wrote in a note to clients. “[Cable One] has also segmented its customer base with higher speed offerings, which we think further insulates the threat.”

Also: Cable's Broadband Slowdown Hasn't Hit Bottom Yet, Analyst Says

Moffett stressed that he  wasn’t criticizing Cable One management or its business, but merely pointing out that the hefty premium its stock price has enjoyed over the years may not be entirely justified. 

“What we are struggling with is stock selection within a cable sector that we believe is oversold and underappreciated,” Moffett wrote. “As much as we admire Cable One, we struggle to see why such a large premium – indeed, any premium – is warranted here. We believe there are better opportunities to be had elsewhere in the group.”

The analyst also worried that without a wireless play to fall back on, the outlook could be even bleaker. Wireless has been the biggest growth engine for Comcast and Charter as broadband growth has declined.  

“Is any premium at all justified if Cable One’s growth prospects are no better – and arguably, without wireless, worse – than Charter’s?” Moffett asked. 

Adding to the pressure is Cable One’s relatively high prices for broadband -- its $80.44 residential ARPU is 23% higher than Charter’s. Although its ARPU can be a bit misleading -- it has extremely low penetration of video, meaning that those remaining generally pay for much more expensive tiers of service, which helps boost the number -- Moffett noted that Cable One customers also tend to pay for higher speeds of broadband which are more costly. That could mean that Cable One has extracted most of the benefit from the video/broadband mix that lies ahead than its cable peers, he said.

That, Moffett wrote, could be enough to send growth metrics southward. He added that with a predominantly rural footprint with customers that have the least disposable income in MoffettNathanson’s coverage universe, Cable One is more vulnerable to price competition. While that had little effect when competitors couldn’t justify building out their networks to its markets, lower cost FWA makes it a whole new ballgame.

“As a percentage of disposable income, Cable One’s prices are the highest in the industry. This could make them more vulnerable to competitive price-based offers and to macroeconomic weakness,” Moffett wrote.  ■ 

Comcast reported zero customer growth in the area of high-speed internet in the second quarter, right after T-Mobile and Verizon collectively touted the addition of more than 800,000 fixed wireless access customers from April - June.

Keeping with the cable industry's ongoing broader mantra, Comcast CEO Brian Roberts insisted he's still not worried about it.

Citing the significant "longterm limitations" of FWA, Roberts described the technology as a "temporary opportunity targeted to value-oriented customers," one driven by a short-term excess of wireless capacity that will soon abate as FWA proliferation increases.

Also read: Comcast Reports Flat Broadband Growth in Q2

Meanwhile, Roberts conceded that the quickening uptake of FWA is impacting Comcast's connections metrics, it hasn't influenced churn. 

Comcast added 354,000 high-speed internet customers in the second quarter of 2021 and 323,000 in the pandemic-impacted April-June period of 2020. 

Writing for our Multichannel News vertical Thursday, Mike Ferrell took a deep dive into whether the growth slowdown being experienced by Comcast and other cable operators is more a matter of saturation than competition from fiber, FWA and other technologies. 

Also read: Cable Broadband Customer Growth Was Down by Around 500K in Q1 ... but Fixed Wireless Added 500K

Certainly, FWA has to be considered a factor. T-Mobile this week reported the addition of 560,000 high-speed internet customers, right after Verizon touted 256,000 FWA additions in Q2. 

And whether it's "temporary" or not, that's influencing Comcast investors, who tanked the stock over 8% Thursday. Charter Communications, which reports earnings Friday, also saw its stock drop over 8%. 

TelevisaUnivision has struck a deal that will make its new ViX Plus subscription video-on-demand streaming service available on mobile devices to T-Mobile subscribers for one year.

The service, set to launch July 21, costs $84 on an annual basis. 

“As the top wireless provider for Spanish-speaking customers in the U.S., we understand what they care about, and today we’re bringing them a whole new way to enjoy the news, TV shows, movies and live sports that matter the most, and it’s all on us,” said Mike Sievert, CEO of T-Mobile. “While AT&T and Verizon are actually raising prices on their longtime customers, we’re doing things the Un-carrier way and giving our customers more without the added cost.” 

Verizon offered Disney Plus and Discovery Plus to subscribers free when those services launched. While AT&T owned HBO, its mobile subscribers got HBO Max at no cost. That ended when AT&T spun off HBO parent WarnerMedia to Discovery.

“We are delighted that T-Mobile is bringing the massive value of ViX Plus to its customers,” said Wade Davis, CEO of TelevisaUnivision. “ViX Plus is launching with an unprecedented scope of Spanish-language content across premium series, movies, sports and more. ViX Plus is the only service built exclusively to represent and serve the Hispanic culture and the collaboration with T-Mobile will be the first to bring this service to its customer base.” 

ViX Plus will offer more than 10,000 hours of exclusive entertainment programming in its first year and serve as the exclusive home to a select number of premium live sports, TelevisaUnivison said. 

ViX Plus customers also get access to everything on ViX, the free, AVOD tier that has more than 100 channels, 40,000 hours of video-on-demand and 24/7 news and sports.   ■

The Federal Communications Commission said 82 applicants have qualified to bid on new midband spectrum in the upcoming 2.5-GHz auction scheduled to begin July 29. The FCC said 11 applicants had not qualified.

Qualified bidders include AT&T, Verizon Communications, T-Mobile, and U.S. Cellular.

Bidders can get early access to the bidding system July 22 and the FCC will hold a mock auction July 26 and 27.

The real auction will begin with a single, six-hour, bidding round July 29 (10 a.m.-4 p.m.), and move to two, two-hour rounds on August 1 (10 a.m.-12 p.m. and 2 p.m.-4 p.m.) going forward, with the pace of the auction changing depending on the progress of the bidding. The FCC increases the number of rounds and decreases the length to goose the auction when bidding slows.

The FCC is opening up midband spectrum in the 2.5 GHz band for 5G. It is currently used, the FCC says underused, by educational broadband services (EBS).

EBS, formerly Instructional Television Fixed Service, or ITFS, was used in the 1960s for closed-circuit broadcasts to educational institutions, but was rebooted in the early 2000s and pointed toward broadband.

Also: FCC Closes Tribal Window for 12 GHz

The FCC has eliminated use requirements and leasing restrictions on the band.

It also created an early local priority window for tribal nations that drew over 400 applications. ■

With the second-quarter earnings season almost upon us, cable investors should prepare themselves for an even steeper falloff in broadband subscriber growth, according to Barclays Group media analyst Kannan Venkateshwar.

Comcast is expected to kick off the Q2 earnings season on July 28, followed by Charter Communications on July 29. But in a research report Thursday, Venkateshwar wrote that there is little hope that the months-long slowdown in broadband growth is nearing an end.

It’s been almost a full year since analysts began bracing for cable broadband additions to slow, and it seems like every quarter there is another call that the impact could be even greater than expected. Analysts have already modified their forecasts for the bigger operators, with some expecting full-year 2022 additions to be nearly one-third of those of the peak year of 2020. Now, with the added pressure of increased fiber buildouts by telcos like AT&T and Verizon Communications, aggressive pricing, the near disappearance of digital subscriber line customers — once a top feeding ground for cable broadband — and sluggish new household formation, that impact could be even worse.

On the telco side, Venkateshwar believes that fixed wireless offerings from Verizon and T-Mobile could have greater unit growth “than the entire cable industry” during the quarter. 

Charter Communications chief financial officer Jessica Fischer pointed to another potential pitfall for cable at the Credit Suisse Communications conference in June, telling the audience that about 60,000 to 70,000 broadband subscribers that had been part of the Federal Communications Commission’s Emergency Broadband Benefit program did not make the transition to the fed’s new broadband subsidy offering, the Affordable Connectivity Program. While Fischer said she believes broadband is a growth business and still expects Charter to add subscribers in Q2, it has caused analysts some pause. 

Venkateshwar, who had earlier predicted Charter would add about 100,000 broadband customers in Q2, now believes they will add none, adding that the gap between it and No 1 cable operator Comcast could be bigger than usual. 

In his note, Venkateshwar wrote that while Q2 is generally seasonal as students leave college and residents move to summer homes, “the slowdown being seen intra quarter goes beyond seasonality impacts.” 

“Charter talked down broadband sub growth for Q2 due to the impact of the rollover from old subsidy programs into new programs in late Q1, and the company’s consumer broadband net adds may tip into negative growth in the quarter,” Venkateshwar wrote. “This is difficult to explain without assuming continued structural impacts on gross adds due to competition as well as broader market saturation.”

The Barclays analyst expects Comcast to add about 74,000 broadband customers in the quarter (down from 354,000 last year), while Altice USA should lose about 20,000 high-speed internet subscribers in the period, compared to zero additions in the same period last year.

While telcos seem to have an advantage given their increased fiber deployment, Venkateshwar wrote that their efforts have been largely tactical, adding that there isn’t much visibility as to the long-term trends. And any big dropoff in cable broadband could lead operators to focus more heavily on wireless, which wouldn’t be good news for telcos. 

“Longer-term, it is tough to see how either industry ends up benefiting from the ongoing convergence in wireless/wireline offerings,” Venkateshwar wrote. “The end state of this process is likely to be potentially more M&A; however, with capital costs rising and a tougher regulatory environment, this may not be available as a solution for a while.” ▪️

Fixed wireless access broadband could add more than 10 million subscribers in the next five years, driven by programs geared toward rural markets, according to a report by Wells Fargo telecom and media analysts Eric Luebchow and Steven Cahall.

In their report, the analysts predict that total broadband subscriber additions will accelerate to 4.5-to-5 million annually in 2023 and 2024, fueled mainly by FWA and fiber overbuilds. Over the next five years, Luebchow and Cahall predict FWA will rise from 7.1 million total subscribers at the end of 2021 to 17.6 million in 2027. That growth will come at the expense of cable operators, who the analysts predict will watch their market share erode quickly over the next few years. 

While fixed wireless has been around for awhile, Luebchow and Cahall expect competition to heat up significantly in the next three years as federally funded programs spur both wireless and fiber build outs for broadband. In their report, they estimate that FWA would capture 60% of net additions through 2024. Then momentum shifts to fiber overbuilders as new inventory comes on the market. 

“In total, we expect +50 [million] new premises to be connected with fiber through 2027 that will reach [two-thirds] of addressable locations,” Luebchow and Cahall wrote. “The competitive dynamics will make the net add story increasingly difficult for the cable players, as we project cable’s share of industry net adds will fall to ~30-35% in 2023 and beyond (vs. ~94% on average the past three years).”

Wells Fargo estimated that fiber builds passed about 50 million homes in 2021 and would more than double that pace to 102 million by 2027. 

While there has been some concern around the lack of a labor force to build fiber networks the analysts believe that is less of a factor with bigger telcos. 

Initially, Luebchow and Cahall see FWA as being the biggest disruptor, mainly because of its low price -- in some cases as much as 50% lower than wireline broadband offerings -- and adding about 5 million new customers in 2022 and 2023. Fiber will take hold in 2024 and beyond, about the time that many of the build out projects started in the past few years will be completed. While that includes some cable operators -- Altice USA plans to pass 6.5 million homes with fiber by 2025 and Charter and Comcast have extended their fiber reach by about 1 million homes per year over the past few years -- Luebchow and Cahall don’t believe it is enough to reverse the coming share shift.

“The net impact is cable players will have to face stiffer competition within their footprints, and they threaten to be crowded out of a secular story that only has room for [about] 3-5 million net adds per year,” they wrote, adding they expect cable’s share of broadband net additions to drop from 87% in 2021 to 30% to 40% by 2027. 

Cable has punched back by bundling broadband and wireless phone service -- Comcast and Charter are both pairing high-speed data service with mobile offerings at a discount. 

T-Mobile and Verizon Communications have been most aggressive on the fixed wireless front, adding 532,000 FWA customers in Q1, according to Leichtman Research Group.  But so far, most cable companies claim they haven’t seen much impact from the service, which for the most part has been concentrated on less populated areas and has targeted business customers like food trucks and construction trailers. 

At the MoffettNathanson Media & Communications Summit May 18, Comcast Cable CEO Dave Watson said so far, FWA hasn’t been a major competitive factor, but that the company is keeping a close eye on the service.

“It doesn't mean that it's not competitive. It doesn't mean that we're going to take it lightly. We're not,” Watson said at the conference, adding that fixed wireless has some issues around speed and latency. T-Mobile advertises FWA speeds between 33 Megabits per second and 182 Mbps, while Verizon FWA service can range from 300 Mbps to 1 gigabit per second. Watson added that two-thirds of Comcast broadband customers take 300 Mbps and higher.

“We're coming from a position of strength in regards to network performance and WiFi performance in the household and we're not going to stop,” Watson said at the conference. 

In their report, Luebchow and Cahall noted that FWA speeds are lower than cable, but they are more than adequate for the most popular applications like streaming video.

“FWA should not be dismissed and will be a viable competitive threat, particularly in rural areas and for customers that prioritize a lower price vs. higher speeds,” the analysts wrote.  ■ 

T-Mobile's latest "Uncarrier" media event, taking place Wednesday, unveiled more bad news for the cable industry, which is watching its recent incendiary home broadband growth quickly decelerate. 

As it turns out, fixed wireless access -- poo-pooed by the large cable incumbents as a competitive non-factor -- might actually be ... a factor. 

And T-Mobile is ramping up the promotional assault, offering its "Magenta Max" unlimited wireless customers its 5G Home Internet FWA service for $20 off the usual cheap $50-a-month price. 

T-Mobile also said that non-Magenta Max 5G Home Internet customers will now be able to lock in that $50-a-month rate for as long as they're a subscriber. 

Of T-Mobile's nearly 109 million wireless customers, only 15% take Magenta Max, but the service tier now represents 50% of the company's new signups. 

T-Mobile said that it's FWA service is delivering average speeds of around 140 megabits per second nationwide, which is plenty fast enough for several users in different rooms of a home to stream 4K video at the same time. 

T-Mobile is further incentivizing its Magenta Max customers to switch to FWA by offering them a $50 rebate on streaming devices from Roku, Google and other major suppliers. It's also offering these customers 50% of virtual pay TV service YouTube TV for a year. These customers get the first month of service gratis. 

It's a bit of a reverse-switcheroo on the top U.S. cable operators, which have for several years enticed their home internet customers to also adopt their nascent wireless offerings with aggressive cross-promotions. 

Cable operators have dismissed FWA as not having the needed network capacity to compete in a world moving to a "10G" future. 

But in case they haven't noticed, inflation is trending right now, and the average monthly price in the U.S. for cable broadband now exceeds $70. 

Certainly, cable operators, which control 70% of the U.S. high-speed internet market, are facing diminished growth.

Comcast reported the addition of 262,000 broadband customers in the first quarter, which was just over half the 461,000 it added in the same period of 2021. Charter Communications added 185,000 HSI subscribers in Q1 vs. 355,000 a year prior. Altice USA lost 13,000 HSI users in the first quarter, citing East Coast competition from Verizon, a T-Mobile wireless rival with growing FWA might of its own. 

T-Mobile reported a gain of 348,000 FWA customers in the first quarter, upping its base to 948,000. Verizon reported last week that it tacked on 194,000 FWA subscribers in Q1. 

With the start of the first-quarter earnings season about 10 days away, J.P. Morgan media and telecom analyst Phil Cusick expects total broadband customer additions to continue to slow, but said a boost from some fixed wireless access providers will make what could have been a really bad quarter a little better.

Comcast is expected to kick off the 2022 earnings season on April 28,  when it reports Q1 results, followed by Charter Communications on April 29.  

In a research note, Cusick estimated total broadband additions of about 674,000 in Q1, a 32% decline from the prior year. But the analyst noted it could have been worse -- his Q1 estimates include 274,000 fixed wireless access (FWA) additions from T-Mobile. Without those FWA customers, total broadband additions would be down 56% in the period. 

Cusick blamed the overall broadband slowdown on sluggish cable growth, weak housing growth (moves are down 17% for the year, according to U.S. Postal Service data), and the loss of about 5 million consumers with access via the Keep Americans Connected COVID-19 program since 2020.  

Cable operators will continue to see sluggish broadband growth in Q1. Cusick estimates that total cable broadband additions will fall 51% to 445,000 in the period from 910,000 in Q1 2021. For the full year, he expects cable operators to add about 1.78 million broadband customers, down from 2.64 million additions in 2021.

Overall, Cusick expects total broadband additions of 2.94 million, a 4% decrease from 3.07 million additions in 2021. Fixed wireless is expected to add about 1.77 million new customers in 2022, down from 2.55 million in the prior year.

But Cusick still expects cable to attract about 66% of new broadband additions -- FWA is in second place with 39% -- mainly because in many areas, cable is the best choice for reliable high-speed connection.

Comcast and Charter are expected to add about 180,000 residential broadband subscribers each, compared to the 448,000 and 334,000 broadband customers, respectively, they added in Q1 2021. 

Analyst: No Sign of a Cable Slump

In his research note, Cusick explained that he hasn’t taken down his overall cable broadband estimates -- unlike some of his colleagues -- not because he believes cable MSOs will do better, but because he hasn’t seen any evidence they will do much worse. 

“Typical seasonality would be for 1Q to be stronger, and most cable commentary in 4Q was that the business improved through 4Q until omicron hit,” Cusick wrote “[W]ith no useful commentary from the companies, aside from consistently denying that FWA is impacting, we prefer to leave our estimates unchanged than reflexively lower the bar due to bullish FWA commentary from [T-Mobile and Verizon].”

Low housing moves and increased pricing will also most likely help boost cable margins, the analyst continued, adding that Charter repurchased about $3.7 billion of its shares during Q1, usually an indication of strong cash-flow growth despite slower subscriber additions. 

For other operators, Cusick sees flat broadband subscriber adds at Altice USA in Q1, and about 11,000 additions at Cable One.

On the telco side, Cusick predicted AT&T would lose about 10,000 broadband customers (15,000 IP additions offset by 25,000 digital subscriber line losses). Verizon Communications should add about 45,000 consumer wireline broadband subscribers (65,000 Fios Internet additions offset by 20,000 DSL losses), he said. Frontier Communications, which emerged from bankruptcy last year and has an aggressive fiber buildout strategy underway, should be well-positioned for growth, according to Cusick. The analyst predicted that Frontier will add 15,000 broadband customers in Q1 (46,000 fiber adds offset by 32,000 DSL losses).

Legacy video losses are expected to be about 1.5 million in Q1, down from 1.67 million in the prior year, but the improvement is more due to waning satellite TV losses. Cusick expects DirecTV/Dish to shed a collective 575,000 customers in Q1 (compared to losses of 750,000 in Q1 2021), while he predicts cable operators to lose 872,000 video subscribers, 5% worse than the prior year. 

Comcast’s video losses are expected to rise to 435,000 from 404,000 in the prior year, mainly because of a price increase that took effect in January. Charter’s video losses are expected to be slightly better in the quarter -- 150,000 compared to 156,000 in Q1 2021 -- reflecting slowing move activity. For the full year, legacy video losses are expected to be 5.3 million, better than the 5.8 million shed in 2021. 

Virtual multichannel video programming distributors (vMVPDs) such as Hulu Plus Live TV, YouTube TV and Sling TV are expected to add about 23,000 customers in Q1 (better than a loss of 92,000 subscribers in Q1 2021). For the year, vMVPDs should add about 1.4 million video customers, about even with the prior year. ▪️

Altice USA said Thursday that it has expanded its existing MVNO deal with wireless carrier T-Mobile, but offered few details of the new agreement.

Altice had been one of the last remaining major cable operators to redo its mobile virtual network operator (MVNO) agreement with a carrier -- Comcast and Charter renegotiated their MVNO pacts with Verizon in 2020 and Dish reached a new MVNO deal with AT&T last year. At the Morgan Stanley Technology, Media & Telecom conference in San Francisco earlier this month, Altice USA CEO Dexter Goei said a new deal with T-Mobile was coming soon. 

On Altice USA’s Q4 conference call with analysts on February 16, Goei said that the company was on the “one-yard line” with T-Mobile regarding renegotiating the MVNO deal, adding that the revised agreement would offer Altice more flexibility and provide “financial incentives” to T-Mobile. 

In a press release, Altice USA said the terms of the new agreement “are mutually beneficial to both companies.”

Altice USA launched its mobile product in 2019, through an MVNO deal with Sprint. Sprint was purchased by T-Mobile in 2020. 

Altice USA is in the process of rebranding its mobile service as Optimum Mobile across both its Optimum and Suddenlink footprints.  As of Q4, Optimum Mobile had about 186,000 mobile lines. Comcast's Xfinity Mobile ended the year with about 4 million mobile lines and Charter closed out 2021 with about 3.6 million mobile lines.  

Also: For Cable Operators, Wireless Gets Real 

“As we continue to grow and evolve our Optimum Mobile service, we are pleased to reach a new agreement with T-Mobile that ensures our mobile customers will continue to benefit from T-Mobile’s nationwide network,”Altice USA EVP of consumer services Matt Marino said in a press release. “In addition to access to America’s largest 5G network, the agreement enables Optimum Mobile to provide more flexibility and value to our customers and, when coupled with our Optimum and Suddenlink broadband service, deliver a 360-degree seamless connectivity experience at home and on the go.”

Optimum Mobile currently offers three data plans -- 1 Gigabyte, 3 GB and Unlimited GB -- all with unlimited talk and text and delivered over the T-Mobile network. The services are aggressively priced -- Optimum Mobile’s 1GB plan is free (not including a $20 activation fee) for the first 12 months and $19 per month ($14 if an Optimum broadband customer) thereafter. The Unlimited GB plan is priced at $45 per month. 

"We are excited to extend and expand our Altice USA partnership on the T-Mobile network with fast and reliable service to Altice USA’s Optimum Mobile subscribers,” said T-Mobile wholesale SVP Daniel Thygesen in a press release. “By leveraging T-Mobile’s unparalleled network and platforms to serve Optimum Mobile subscribers, Altice USA remains the premier one-stop-shop for bundled mobile and broadband services for its subscribers."

Telcos like T-Mobile and Verizon could double their fixed wireless subscriber additions in 2023, according to Wells Fargo Securities media analyst Steven Cahall, who predicts that as competition between cable and telco service providers to extend their broadband reach into more rural markets heats up, capital intensity will rise too.

T-Mobile and Verizon have made the most headway on the 5G fixed wireless front, adding about 300,000 locations combined in Q4 2021. As mid-band network coverage improves, 5G fixed wireless offerings from those two companies are expected to scale and Cahall expects their 2022 estimated net additions of 1 million to 1.5 million to double to 2 million to 3 million in 2023.

“While T-Mobile has successfully been winning share in urban and suburban areas to date, we think the rural area remains the most feasible for broader fixed wireless adoption, with excess network capacity and more favorable competitive dynamics,” Cahall wrote.

Also: Verizon Recasts Jim Carrey as the Cable Guy for Super Bowl Fixed Wireless Ad 

But reaching those rural areas will cost money, and both sides seem to be willing to pony up whatever is necessary.   

In his research note, Cahall wrote that T-Mobile, Verizon and AT&T have already boosted spending on fiber and fixed wireless this year -- he estimated telcos will spend about $9 billion to connect 8 million new subscribers to fiber in 2022 and will add 9 million to 10 million new premises per year. AT&T, he wrote, appears positioned to add about 3.5 million new fiber locations in 2022 (up from 2.6 million in 2021). 

Also: Verizon Expands Fios and 5G FWA Promo to Include the Disney Bundle 

For cable operators, capital intensity (capital expenditures as a percentage of sales), on the downward trend over the past few years as network buildout projects have been completed, will be on the way up beginning in 2022. Cahall estimates that Altice USA will see the biggest jump in capital intensity (from 12.8% in 2021 to 17.8% in 2022), followed by Charter (from 14.4% in 2021 to 16% in 2022) and Comcast (from 10.8% in 2021 to 11% in 2022).

Cable operators are expected to continue to deploy fiber, extending their reach deeper into rural markets. But Cahall added that they may have to tick up spending as telcos continue to encroach on the space and gain share, particularly through 5G fixed wireless broadband. 

Also: Analyst Says Telcos Better Positioned to Chip Away at Cable’s Broadband Lead 

“[W]e think connectivity markets have the makings of an arms race, so availability and speed improvements from cable/fiber/5G will lead to more higher-speed use cases (e.g. 8K video) that begets more connectivity competition that begets more capex,” Cahall wrote. “We thus think investors should not assume any capex holidays for Cable (as % of sales).”

Cahall sees fiber networks serving the heaviest broadband users -- those that work/school from home, are heavy streaming video users and/or gamers -- in rural markets. Lighter broadband users would gravitate to lower cost, lower speed fixed wireless offerings, he wrote.  

Also: Fixed and Dilated

Those lighter broadband users also tend to be older, tend to be more likely to subscribe to traditional pay TV and don't require ultra-high speeds for their data. Cahall pointed to Social Security Administration data that showed there are about 60 million U.S. residents over the age of 65, likely representing about 40 million homes that over-index on linear pay TV and under-index on heavy data download and upload requirements. 

“As fixed wireless technology improves, we think that base of lower data consumption homes will become ripe customers for 5G with a wireless phone plan bundle,” Cahall wrote. “These cohorts may not seem like the obvious ‘early adopter’ set, but if 5G is inferior to fiber and DOCSIS 4.0 then it's exactly the sort of homes telco's 5G proponents like Verizon and T-Mobile may target. This is yet another medium-term risk to cable net adds and earnings.”

While most of the industry is bracing for a slowdown in cable broadband subscriber additions, Cahall estimated that cable operators should see their high-speed data customer growth moderate from an average of 4.6% between 2017 and 2019 to 2.6% between 2020 and 2025. At the same time, he predicted fiber and wireless broadband customer growth would increase by 13.9% and 19% from 2020 to 2025. As a result, cable broadband market share should drop from 65% in 2020 to 63% in 2025, while fiber would grow from 12% to 21% and wireless would more than double from 5% to 11% in the same time period. 

“In short, the threat of fiber/fixed wireless is real, and its impact should only intensify as time advances,” Cahall wrote. ■

T-Mobile CEO Mike Sievert described his company's fixed wireless access (FWA) home internet product as being "mainstream" and "ready for its prime time moment" Wednesday, after revealing that the nascent service finished 2021 with 646,000 customers, up from only around 100,000 in one year. 

"The majority of our customers come from suburban and urban markets, and the majority of those are coming from cable and fiber, and other things," added Dow Draper, executive VP of emerging products for T-Mobile, speaking alongside Sievert during the wireless company's Q4 earnings call. 

"We're half the price in a lot of cases against cable companies when you add in their fees and all the different charges they have. Also, it's simplistic. We don't have price hikes. I mean, customers are generally very unhappy with the cable industry," Draper added. 

T-Mobile is currently promoting its 5G Home Internet service for $50 a month to existing customers in markets including Los Angeles, touting that everything associated with the product, including the 5G gateway, comes without any additional fees or "hidden costs." 

Currently, cable operators control around 70% of the wireline broadband market in the U.S. 

However, Bloomberg published new data on Wednesday suggesting that 22% of the 3.7 million new broadband customers signed up by U.S. telecom companies in 2021 were FWA subscribers. T-Mobile accounted for the largest portion of those 819,000 FWA signups, but Verizon's nascent FWA service factored in, as well. 

For their part, equity analysts have for the most part dismissed the notion that wireless companies can make a more significant dent in cable's wireline internet dominance with FWA, citing a lack of network capacity as one of the reasons.

Sievert, however, claimed that T-Mobile FWA users are consumer 300-400 gigabytes of data per month, with a portion of the based even exceeding 1 terabyte of monthly usage. 

"I think some people are going to be surprised at how mainstream this [FWA] product really is," Sievert said. 

Cable operators, already gearing up for a slowdown in broadband subscriber growth in the fourth quarter, are likely to see a slight overall deceleration of mobile phone customer additions in Q4, driven by lighter numbers at Charter Communications, according to J.P. Morgan media analyst Phil Cusick.

Cable operators have already warned that the expected slowdown in broadband customer growth could get steeper in Q4. Comcast Cable CEO Dave Watson told a virtual audience at the UBS TMT Virtual Conference in December that it would likely add about 1.3 million broadband customers in 2021, implying that Q4 additions would be about 185,000, its lowest quarterly growth since Q2 2017. Watson was echoed by other cable execs at the conference like Altice USA CEO Dexter Goei, who implied that Q4 broadband subscriber growth could be negative in Q4 and for the year. 

But mobile service was expected to continue its torrid growth pace. Comcast’s Watson predicted that his company would add a record number of mobile customers in the quarter, beating its previous best of 285,000 additions in Q3 2021.

Also: Comcast Q4 Broadband Results Narrowly Miss Consensus; Dividend Upped

In a research note Thursday, Cusick wrote that he expects Comcast to surpass that old mark, adding about 300,000 mobile customers in Q4, ending the year with 1.14 million additions. But he believes Charter will add about 260,000 mobile subscribers, below the 315,000 it added in Q4 2020. He estimated Altice USA would add about 2,000 mobile customers in the quarter, down from 7,000 in Q4 2020. 

Overall, Cusick expects cable to add about 562,000 mobile customers in Q4, implying a 20%  share of total growth for the sector in the period, compared to 23% in Q4 2020. For the full year, Cusick estimates that cable will add 2.23 million mobile customers, or about 24% of total ecosystem growth, compared to 35% in 2020. 

Cusick sees the slowdown continuing into 2022, forecasting that Comcast mobile subscriptions will be about 1.047 million next year, and Charter slipping to 1 million additions. Cusick predicted that Altice USA would grow mobile customers by 29,000 in 2022, up from 13,000 in 2021. 

Also: Charter Falls Short of Broadband Subscriber Targets, Wireless Soars

Other analysts have revised their Charter estimates as well. In a January 3 report, Bernstein media analyst Peter Supino pointed to a possible industry-wide mobile deflation risk, and revised his expectation for Spectrum Mobile subscriber additions to 252,000 from 277,000 in Q4.  

The answer should come in the next few weeks. Comcast is scheduled to report Q4 results on January 27, with Charter reporting on January 28. Altice USA has not said yet when it plans to release Q4 results, but usually does so in early February.   

Cable operators have been aggressively pricing mobile service in the past year — Comcast dropped monthly pricing to $30 per month per line for four lines minimum in April — and have added device promotions and discounts for customers that switch service.

According to Cusick, Comcast’s Xfinity Mobile now offers up to $400 in device credits for any iPhone 13 users that switch — double its prior offer. Cable companies also have benefitted from their ability to bundle wireless service with broadband, which has had a big impact on wireless customer growth. 

Also: Analyst Says It’s Time to Take Cable's Wireless Seriously  

Cusick added that his estimates for Charter could be a bit low, given the operator’s aggressive discounting in October, dropping monthly charges for two lines or more to $29.99 from $45 per month. And Charter CEO Tom Rutledge has said he sees the wireless business as a huge catalyst for the future.

Back in December at the UBS conference, Rutledge did not offer any future subscriber growth guidance but said that going forward, the biggest growth driver for the business overall is mobile. 

And both Charter and Comcast have seen the benefits of bundling broadband and mobile, with efforts to pair the two more aggressively beginning last year.  

At the same time, the Big Three (AT&T, Verizon and T-Mobile) wireless players are beginning to see their subscriber dominance wane. AT&T, which Cusick expects to more than triple its wireless subscriber additions in 2021 to 3.19 million from 1.46 million in 2021 — largely due to aggressive device promotions — will see that growth dip to 2.35 million additions in 2022. He predicted that Verizon, which should nearly double its mobile additions in 2021 to 1.101 million from 667,000 in the prior year, will fall back to about 875,000 additions in 2022. T-Mobile, which is expected to add 2.917 million mobile customers in 2021 — up from 1.87 million in 2020, will add 2.4 million in 2022 according to Cusick. ■

T-Mobile's TVision virtual pay TV business lasted only six months, shut down last April after the wireless carrier made some cataclysmically bad miscalculations about what it could do with its program licensing agreements. 

However, TVision Hub, the eponymously named streaming dongle that T-Mobile sold along with the short-lived vMVPD service, lives on. In fact, it's now been upgraded from Android TV to the new Google TV OS. 

As first discovered by 9to5 Google, T-Mobile is now advertising the device, manufactured by SEI Robotics, on its web portal, providing it free to its 4G and 5G fixed wireless customers. T-Mobile is also selling its next-generation TVision Hub for $50, the same price the first iteration sold for. 

Notably, Google also sells its 14-month-old Chromecast with Google TV for $50. But Google's first device featuring Google TV lacks an Ethernet port, which the TVision Hub has.

T-Mobile pivoted to marketing Google's YouTube TV  and Philo vMVPDs when it scuttled TVision in April, so it has a device to help its fixed wireless customers stream that video when they sign up. 

T-Mobile is appealing a recommendation by the National Advertising Division (NAD) of BBB National Programs that it discontinue claims that its 5G network is most reliable.

AT&T had challenged several claims in T-Mobile ads and NAD had recommended T-Mobile stop claiming it was "America's....Most Reliable Network," as well as Verizon was stealing 4G bandwidth for 5G and the implied claims that 5G using DSS is inferior to low-band 5G using standalone spectrum and that T-Mobile's low-band 5G is a substantially different and better experience.

Also: T-Mobile Pulls Tom Brady, Gwen Stefani Ads

T-Mobile had cited an independent audit report by umlaut (T-Mobile paid the company to use the results in the ad but did not commission the audit) that used crowdsourced data from mobile wireless customers. But NAD concluded that umlaut's methodology was not "a good fit" with T-Mobile's reliability claim saying that its speed and coverage metrics alone were not sufficient to draw that conclusion.

T-Mobile in its appeal said that “like other similarly situated advertisers, T-Mobile should be able to advertise this independent award."

Back in February, AT&T lost its own appeal of an NAD recommendation that it "either stop making the claim that it is "building 5G on America's best network," or clarify that the network is referring to its 4G network.

Wireless carriers keep NAD pretty busy with claims, counterclaims and appeals of their respective claims about wireless superiority. ■

T-Mobile and ViacomCBS on Thursday announced that new and existing T-Mobile and Sprint customers can get a full year of Paramount Plus Essential for free.

"At T-Mobile, everyone means everyone. And now, every one of our postpaid consumers can get a mountain of awesome entertainment with Paramount Plus Essential on us for a full year. That’s true whether you have a consumer or a home internet plan and whether you have a new Magenta Max plan or are on a plan from 10 years ago,” said Jon Freier, consumer group president at T-Mobile. “With Paramount Plus, in addition to all our other streaming benefits, customers can truly watch virtually anywhere, anytime, on any smartphone and all at no extra cost with T-Mobile.” 

Customers can go to a T-Mobile website to sign up for the free year of the ad-supported version of Paramount Plus. After 12 months, the subscription will renew for $4.99, or the current price.

“The partnership with T-Mobile is a key part to our growth strategy as we continue to scale Paramount Plus to become a global leader in streaming,” said Jeff Shultz, chief strategy officer and chief business development officer, ViacomCBS Streaming. “This incredible offer is available to T-Mobile’s full suite of postpaid consumers, exposing Paramount Plus to a massive new and diverse audience that will have the opportunity to experience the service’s unmatched content portfolio and unique value proposition as a total household product.” 

Sports Illustrated used to have a tongue-in-cheek feature in the magazine that offered some absurd factoid about the sports world under the headline This Week’s Sign That the Apocalypse is Upon Us, like how in 2016 if you were in Cleveland and asked your iPhone, “Which Way is Sadness?” Siri directed you to FirstEnergy Stadium, home of that city’s often-maligned NFL franchise, the Browns. But they had nothing on Wells Fargo media analyst Steven Cahall’s Nov. 1 report that stated this: The reason for the current slowdown in broadband subscriber growth could be that cable customers are too happy with their service provider.

Now I am not doubting the Wells Fargo report at all — it makes perfect sense. It’s just that in 30 years of covering this industry — 23 at Multichannel News — I never thought I would see the day that growth would slow because customers like their cable company too much. 

Broadband growth definitely slowed in Q3, with Comcast reporting 300,000 high-speed internet additions — in line with estimates — and Charter Communications adding about 265,000 customers, well below analysts’ predictions. While most expected broadband additions to taper off as the pandemic waned, for some the slowdown is happening faster than expected.   

Analysts have been trying to wrap their heads around the cause of the slowdown for days, after both Comcast and Charter reported that broadband subscriber additions slowed in Q3. For Comcast, the slowdown was almost exactly as expected: 300,000 additions, compared to estimates it would add between 295,000 and 305,000 high-speed internet customers. Charter was a bit of a surprise by coming in lower than expectations. Some estimates were for as high as 350,000 additional broadband customers in the period.

What has puzzled some analysts is this: Everyone expected growth to be lower than it was in pandemic-fueled 2020 because people are beginning to go back to work and school and  maybe don’t need as robust an internet connection at home. High penetration rates for broadband service — about 85% by some estimates — also was expected to be a factor for the simple reason that having fewer consumers without service probably means that fewer new customers will sign on. At the same time, cable companies are saying they see a lot of runway for growth ahead, and predict they will end 2021 with around the same growth rates as 2019.

But given the Q3 data for Comcast and Charter, that probably means Q4 growth will be even slower than Q3. Comcast added 1.4 million broadband customers in 2019, and to meet that goal will have to add about 292,000 high-speed internet customers Q4. Charter has said that now it may be a better idea to compare this year to 2018, when it added about 1.3 million internet customers, meaning in Q4 it will likely add about 251,000 broadband customers. 

In a research report last Friday, MoffettNathanson principal and senior analyst Craig Moffett wrote that much-slower Q3 growth is probably due to a series of factors, including 0% new housing growth and fewer moves.

“Broadband growth will inevitably slow as full penetration is achieved,” Moffett wrote. “And, yes, fiber expansion will mean more of Cable’s footprint will be overlapped by a competing service. That, too, will dampen broadband growth. But all that has been in everyone’s numbers for a very, very long time.”

Back to Campus, Back to Home Buying

But in a research note Monday, Cahall wrote that he believes there is more to the story. 

According to Cahall, new home sales are up 18% so far in 2021 compared to 2019 and up 7% in Q3 2021 vs. Q3 2019, while rental market reports show that segment is returning to pre-pandemic levels, as first-half 2021 applications were up 13% vs. the same period in 2020 and students are returning to college campuses.

“So what's happening?” Cahall asked. “Well, we think that customer churn is low because broadband customers are pretty happy, many having upgraded during the pandemic.”

In addition, Cahall wrote that while consumers are still moving, gross additions and deactiviations may be less because those customers might be staying with their current cable provider. But that elation is a two-way street.

“Cable's subs are happier, but the competition’s subs are happier too,” Cahall wrote, adding that low-income programs like the Emergency Broadband Benefit program may be contributing less. 

At the same time, telco high-speed internet additions are improving. Cahall wrote that in 2019, AT&T, Verizon Communications and Lumen Technologies lost about 417,000 broadband customers. This year he believes those three companies will add 240,000 high-speed internet customers or more. At the same time, cable broadband growth is rising at a less accelerated rate.

Cahall is not alone in his estimates that telco fiber builds could vault that sector ahead in the broadband wars. In October, Bernstein media analyst Peter Supino wrote that he believed telcos like AT&T, T-Mobile and Verizon could chip away at cable’s broadband lead. 

Cahall estimated Comcast’s and Charter’s combined broadband subscriber additions will drop from 2.81 million in 2019 to 2.66 million in 2021 (down by about 150,000), while 2022 combined growth will be more than 400,000 subscribers lower than 2019 figures. 

“Whether its fiber or lack of low-hanging fruit from DSL, we think Telco trends hurt Cable growth + valuation, and portend badly for potential ARPU implications,” Cahall wrote.

In his note, Cahall predicted that cable residential broadband growth would rise by about 2.1% annually between 2021 and 2025, from 76.2 million customers to 81.5 million customers, while telco broadband subscribers would climb at a 15.8% annual clip from 15.99 million in 2021 to 29.45 million by 2025. At the same time, legacy DSL subscribers would fall at about a 14% rate, from 16.4 million in 2021 to 8.7 million in 2025, according to Cahall.   

“Whether the recent headwinds are move churn or Telco something else, we think the overhang on sentiment is real and will persist,” Cahall wrote, adding that no matter how you slice it competition is coming in 2022. That competition will likely take the form of fiber rollouts by AT&T, Lumen and T-Mobile, which said recently it expects 500,000 5G broadband customers by the end of 2021. Verizon, which has given guidance for over $1 billion in fixed wireless revenue by 2024, which could translate into between 1 million and 2 million broadband customers.

“While it’s tough to know where, we think the fact that these 5G rollouts are guidance mean the Telcos have high conviction in some share gains,” Cahall continued.

T-Mobile has agreed to pull ads making claims that the National Advertising Division (NAD) of BBB National Programs (formerly the Better Business Bureau), have determined were not supported.

The move is a bit like closing the closing the barn door after the team of horses has gotten out, since both ads debuted during CBS’s Feb. 7 telecast of Super Bowl LV to a huge audience and have been airing ever since.

Also Read: Verizon Agrees to Drop Certain Ad Claims

The two ads featured GOAT quarterback Tom Brady and singer Gwen Stefani in the now familiar format of conversations that get garbled, presumably on the networks of T-Mobile competitors, to humorous and embarrassing results.

NAD can only recommend, not mandate, such actions.

T-Mobile said it “is disappointed by NAD’s conclusion that consumers may take away a negative message from its humorous commercials,” but agreed to pull them anyway.

Wireless and wired broadband companies routinely counter-complain against one another over various service claims.