T-Mobile launches commercial 5G Home Internet

T-Mobile announced its Home Internet service as a replacement for cable, moving it out of the pilot phase and emphasizing rural and small town areas that are in dire need of new choices.

In its latest “un-carrier” event, T-Mobile made a big deal about its rural coverage for 5G. What it didn’t highlight so much: T-Mobile and Sprint made commitments to the FCC to cover 97% of the U.S. population with 5G within three years of their deal’s close, which happened a year ago. They were specifically committed to build out 5G to rural communities, which so happens to be where the carriers historically didn’t have decent coverage with earlier generations of wireless.

But T-Mobile is in a different position with 5G, thanks to its 600 MHz coverage layer and in large part, the 2.5 GHz spectrum acquired though the Sprint merger.

During an online webcast Wednesday, T-Mobile CEO Mike Sievert announced the Home Internet commercial service launch amid great fanfare –  after first outlining a series of moves to goose its 5G subscriber count.

The company says it will provide a 5G smartphone for free to both new and existing customers. It’s offering the new Samsung Galaxy A32 5G smartphone for free, exclusive to T-Mobile postpaid customers, with a trade-in of any working phone, and it’s targeting AT&T and Verizon customers who are on limited plans.

However, the most heavily anticipated news in some circles was that about T-Mobile’s Home Internet, which is its version of home broadband that many wireless operators and smaller entities have been going after for years. The pandemic put an even finer point on the need for these types of services.

Sievert said more than 30 million homes are eligible today, or almost one in five American households, making T-Mobile one of America’s largest ISPs by service area. Some 10 million of these homes are in small towns or rural areas. Verizon, which several years ago flagged 30 million households as its goal for fixed wireless access (FWA), won’t reach that for at least two more years, he noted.

Based on T-Mobile's pilot program that’s been in the works for over a year, customers are giving T-Mobile a net promoter score that’s 104 points higher than their previous ISP, “because our service is so simple, and fast, and straight-forward,” Sievert said. Customers can expect to get average speeds in excess of 100 Mbps, with no data caps.

Update: According to a T-Mobile spokesman, here are the spectrum bands that T-Mobile is using for its Home Internet service: LTE bands 2 (1900 MHz), 4 (1700/2100 MHz), 12 (700 MHz), 66 (1700/2100 MHz) and 71 (600 MHz), as well as 5G New Radio (NR) bands 41 (2.5 GHz) and 71 (600 MHz). 

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It’s taking on the cable duopoly, saying there’s “no waiting for the cable guy.” T-Mobile will ship a wireless router to a customer’s home and charge $60 a month, with router included. Customer service reps can help with installations if needed; T-Mobile also announced a new program with Hometown Experts, who will be available in some 2,500 towns to help with service too.

Critics who opposed T-Mobile’s merger with Sprint often cite the loss of jobs due to the deal. Throughout the regulatory proceedings around the merger, T-Mobile executives emphasized the notion of creating more jobs rather than eliminating redundancies, as mergers tend to do.

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As part of Wednesday’s announcements, T-Mobile EVP/Consumer Group Jon Freier announced Hometown Jobs, a plan to create 7,500 new jobs in rural areas. Over the next two years, it will open up “hundreds” of new stores in small towns across the country. These stores will create 5,000 new jobs, along with jobs for people who build, furnish and maintain them, he said.

But it would be difficult to open a store in every town, so T-Mobile is creating what it calls a new model to disrupt the status quo, he said. It’s called Hometown Experts – there are no storefronts involved, so T-Mobile doesn’t have that expense. Instead, the Hometown Experts will act as official T-Mobile representatives, like a one-person store but without the physical building, explained Freier. They can help customers get connected with Home Internet and other needs. T-Mobile said it plans to hire and train 2,500 Hometown Experts in 2,500 small towns over the next two years.

Uptake still big question

T-Mobile previously forecast it could serve 7 million to 8 million subscribers with fixed wireless by 2025, but some analysts think it will end up being half that, or less.

In a report for investors prior to today’s announcement, New Street Research analyst Jonathan Chaplin noted that T-Mobile makes 40 times the revenue per GB from mobile subscribers than they would from fixed broadband subs, so they’re only going to sell capacity to fixed broadband subs in markets where they have more capacity than their mobile subs could ever possibly use.

Based on New Street’s estimates for T-Mobile’s capacity, subs, usage per mobile sub and usage per fixed sub, the operator could support 4.1 million average fixed broadband subs in markets where T-Mobile has excess capacity.

The analysts also noted they’re not sure what the demand will be for the product. “We don’t think there would be much demand at all in markets with fiber or upgraded cable at the $60 T-Mobile has been charging; they will have to lower the price to engage any demand at all,” he wrote.

‘Un-carrier’ moves under scrutiny

The topic of home broadband was widely expected for this “un-carrier” move. But as some in the industry have observed, including analyst Mark Lowenstein, it looks as though T-Mobile’s old brashness when it came to “un-carrier” moves has worn off as the lower-hanging fruit was picked off.

One of its “un-carrier” moves, the TVision announced in October, went sideways and T-Mobile ended up announcing it will shut down its TVision Live and TVision Vibe streaming TV services just five months after they first launched. The company then turned it into a deal about Google’s YouTube TV and an offering from over-the-top TV provider Philo.

There have been other shots at its “un-carrier” positioning as well since the merger with Sprint. Faced with an unexpected shutoff of Sprint’s CDMA network by January 1, 2022, Dish Network wasted no time in accusing T-Mobile of losing its “un-carrier” ways. Dish has suggested that T-Mobile’s moves are downright anti-competitive, in that if Dish/Boost doesn’t have access to the CDMA network, a lot of those customers will land in the hands of T-Mobile or be left without any service at all.

Article updated April 8 with additional information about spectrum bands for Home Internet.