Merged T-Mobile/Sprint to challenge Comcast, Charter to become nation’s 4th largest in-home ISP

If regulators approve their merger proposal, Sprint and T-Mobile promise to offer in-home internet services to roughly 9.5 million American households by 2024, or about 13% of the country. The company said that figure would give it a market penetration of around 7%, making it the nation’s fourth largest in-home ISP based on current subscriber counts.

“The combined company’s 5G network will deliver mobile broadband speeds in excess of 100 Mbps to roughly two-thirds of the population in just a few years and 90% of the country by 2024. This is a mobile connection so fast, millions will be able to cut the cord with Comcast, Charter and the rest. We’ll offer both in-home broadband services and mobile broadband, so customers can pocket the savings from eliminating that pricey wired in-home broadband bill every month if they choose,” T-Mobile CEO John Legere wrote in a post. “These cable/broadband providers are some of America’s most hated companies in the market, and for good reason—they treat their customers horribly because so many of their customers don’t have any choice! Personally, I can’t wait to bring the fight to them! In fact, I plan for the New T-Mobile to be the country’s fourth largest in-home ISP by 2024, freeing millions from the likes of Comcast and Charter in the process!”

Sprint and T-Mobile’s promise to tackle the in-home internet service provider marketplace represents a new factor in their push to obtain regulatory approval for their proposed merger. Details of the companies’ new in-home broadband effort are contained in their new 700-page public interest filing with the FCC. Such filings are required for mergers and transactions involving spectrum licenses.

Indeed, the public interest filing by Sprint and T-Mobile includes a range of details about their plans to merge, including the expected coverage and performance of their planned 5G network. In their filing, the companies detail exactly how they will use 5G technology to offer both mobile and in-home internet services.

And, importantly, Sprint and T-Mobile appear to indicate that the cost of their in-home internet service would be included in the cost of their mobile service. “Consumers who choose to cut the in-home wired broadband cord and utilize New T-Mobile’s 5G mobile wireless service to meet their in-home broadband needs will see the most savings,” the companies wrote. “By way of example, today such a consumer might pay $80 per month for their wired in-home broadband service and $60 per month for mobile wireless service, for a total of $140 per month. Once New T-Mobile deploys its broad and deep nationwide 5G network that will deliver service approximating or exceeding the speed and quality of wired broadband offerings, this same consumer may find it desirable to terminate his or her wired broadband subscription and rely exclusively on New T-Mobile’s 5G mobile offering. That consumer would now pay only $60 per month for equivalent services that previously cost $140—pocketing an $80 savings every month.”

In their filing, Sprint and T-Mobile made very clear their plans to sell services to in-home broadband users, in a direct challenge to established ISPs like Verizon, Charter and Comcast: “The combined company intends to directly and aggressively compete against conventional in-home wired broadband products, providing consumers with an attractive high-speed broadband alternative to the wired incumbent—some for the first time. The new 5G network’s performance and low prices will incentivize consumers to ‘cut the cord,’ pocketing the savings from eliminating their wired broadband bill month after month.”

Added Sprint and T-Mobile: “Today, 19 percent of households could eliminate their home broadband subscription entirely by tethering on a T-Mobile two-line plan. New T-Mobile will accelerate this trend by providing an increasingly viable alternative to in-home broadband. By 2024, 35 to 45 percent of households could completely eliminate their home broadband subscription and rely on New T-Mobile for all their broadband needs.”

It’s worth noting Sprint and T-Mobile, which are hoping to merge into the so-called “New T-Mobile,” aren’t the only companies targeting the market for in-home broadband via 5G. Verizon this year plans to launch fixed 5G services for residential and commercial users in four cities this year, including Sacramento and Los Angeles. The company has said it will offer speeds up to 1 Gbps via its millimeter-wave spectrum. However, Verizon has cautioned that its fixed 5G efforts (fixed 5G is another term for in-home broadband) will only address a maximum of 30 million households, or around 24% of the overall U.S. market. To be clear: Verizon hasn’t said exactly how many households it will cover with fixed 5G, only that the maximum addressable market for the offering is 30 million households.

(Also, there are around 126 million households in the United States; most households contains multiple users.)

Sprint and T-Mobile announced their ambitious plan to merge in April, and are currently working to obtain consent from the Department of Justice, FCC and other federal regulatory bodies. The companies have said they hope to close their proposed transaction by early next year, but most Wall Street analysts haven’t given the transaction very good odds – though that may be changing given AT&T’s recent move to close its purchase of Time Warner over the DoJ’s opposition.