T-Mobile, Verizon top cable in Q3 broadband: LRG

Over the past year, the combination of T-Mobile and Verizon fixed wireless access (FWA) services accounted for 101% of the approximately 3,625,000 net broadband additions, according to a new report by Leichtman Research Group (LRG).

In fact, T-Mobile is the fastest-growing internet provider in the U.S., a trend that started almost two years ago, noted LRG President and principal analyst Bruce Leichtman.

It’s no surprise to people who have been watching the FWA space. Combined, T-Mobile and Verizon added about 940,000 FWA/5G home internet subscribers in Q3 2023, compared to the top cable companies’ broadband net adds of about 5,000 in Q3, according to Leichtman.

“They’re addressing a value segment for people who it’s a ‘good enough’ service,” he said of the FWA providers. “For many people, the compact car is good enough. That’s all they want. That’s all they need and I think that’s what we’re seeing in the 5G segment. It’s very much about value and convenience.”

Both T-Mobile and Verizon have managed to make FWA-based home internet service an easy installation, and “the bundle is very important because the majority of these people have the service bundled with the mobile offering,” he said.

Verizon’s stated FWA goal is to serve 4 million to 5 million customers by the end of 2025, and it now counts almost 2.7 million FWA subscribers. But it’s important to remember that 35% of the net additions for Verizon are non-residential; they’re small businesses, and that’s likely a similar figure for T-Mobile, but it doesn’t break out residential versus non-residential, Leichtman said.

Most of these FWA customers are composed of the convenience segment that skews younger and isn’t necessarily what is traditionally thought of as a family household; they might be a household of renters and it’s “good enough” to appeal to them, he said. It’s a segment where T-Mobile and Verizon are “hitting very well,” he added.

The capacity issue

Leichtman said he thinks the capacity issue comes into play more like two or three years from now. Both T-Mobile and Verizon are essentially only about two years into the FWA business, so churn hasn’t been that big a factor. “As you continue to grow, churn becomes more of a factor in the overall numbers,” he said.

“I think what we’re seeing, whether it’s prepaid or postpaid, it's really addressing the value segment of the market,” he said.

AT&T isn’t mentioned in the report, but it has not been nearly as aggressive in FWA in the 5G era. However, it’s getting in the game, adding about 25,000 AT&T Internet Air subscribers in Q3 2023. It’s worth noting that T-Mobile doesn’t have the kind of landline operations that the other two have, and AT&T places a heavy emphasis on fiber.

On the flip side of all of this, cable is growing faster in acquiring mobile lines than the entrenched wireless players. Total fixed wireless subscribers topped 6.9 million in Q3 2023, while mobile phone lines served by cable – mainly Comcast and Charter – now total more than 13.8 million, Leichtman said.