Some questions about T-Mobile’s Home Internet service remain unanswered, including the cause of a deceleration of subscribers from the third quarter to the fourth quarter last year.
However, the analysts at MoffettNathanson took a stab at examining that and other issues related to fixed wireless access (FWA) in a new report released this week. The report is basically an update of one from a year ago in which it worked with Opensignal, formerly Comlinkdata, to analyze where FWA subscribers are coming from.
Not a lot has changed from a year ago. Opensignal’s estimates of T-Mobile’s FWA subscriber mix show significant over-indexing in rural areas relative to the size of its footprint.
“The mix changes over the past year are incredibly subtle,” wrote analyst Craig Moffett. “The overall takeaway is therefore unsurprisingly unchanged; the subscriber base skews rural but is still predominantly non-rural.”
The report, which also touches on Verizon’s FWA business, noted the deceleration in T-Mobile’s net additions – it reported 578,000 net FWA adds in the third quarter and 524,000 net FWA adds in the fourth quarter of 2022 – which has come despite a significant increase in the availability of FWA.
T-Mobile 5G Home Internet is now available to more than 50 million homes, up from over 30 million homes a year ago. Meanwhile, the number of homes eligible for Verizon’s 5G FWA service has increased to more than 40 million homes, up from over 20 million previously.
“The cause of the deceleration at T-Mobile remains unclear,” Moffett wrote. One possible explanation could be churn, and anecdotal reports of customer frustration with service consistency suggest churn rates may be relatively high, particularly in non-rural areas where high-speed wired alternatives exist, he said.
“That said, the evidence for service dissatisfaction is purely anecdotal; whether episodic reports of consumer frustrations are meaningful in broader context is uncertain,” he said.
“Interestingly, T-Mobile’s FAQ has updated the service’s typical download speeds from 35-115 Mbps to 33-182 Mbps since our initial report,” Moffett wrote. Expected upload speeds, of 6-23 Mbps, remain the same.
“Those speeds are far below what is routinely offered by even introductory-level wired alternatives but are high enough to meet virtually any actual need, including streaming multiple HD video streams simultaneously,” he said, adding that just as there are anecdotal reports of service frustration, there are plenty of reports of speeds that are much faster than promised.
Ongoing capacity questions
One of the digs aimed at FWA is the ability to meet capacity requirements by users who tend to use the internet a lot more heavily. Both T-Mobile and Verizon use their mobile networks to serve FWA internet customers, something cable companies have latched onto and use in marketing to suggest that FWA service isn’t as good as their own. Of course, T-Mobile and Verizon say that’s not so.
The recent deceleration in FWA subscribers at T-Mobile could be an aberration. It’s also important to remember that capacity can’t be measured at the total network level but instead at the individual cell tower or even individual cell sector level and at specific times of the day, Moffett said.
At a broader level, “we are not seeing signs of network congestion,” he said. “Opensignal tested for the occurrence of download speeds falling below 1.5 Mbps – admittedly a low bar – and found no change in the frequency from the already-low levels from Q2.”
The investment analyst firm suggests the most interesting and perhaps most important part of the year-ago report was the illustration of how T-Mobile is managing the capacity issues. The company has been up front about how it will offer its unlimited home internet service only where it’s assured there’s enough capacity for a great experience.
“It was clear then – and it remains clear now – that T-Mobile is being very careful to only take subscribers where their network can handle them,” he wrote.
What’s not so clear is whether lower-capacity areas are constrained due to overuse of the network or instead because T-Mobile’s spectrum assets haven’t yet been fully deployed, the report concluded.
During an investor conference last month, T-Mobile President of Technology Neville Ray talked up the network capacity capabilities that are enabled by 5G.
He said T-Mobile continues to deploy mid-band assets, including 2.5 GHz, PCS at 1.9 GHz and, by the end of the year, AWS spectrum. It also secured “great volumes” of spectrum in both C-band and 3.45 GHz, he said, and “we’ll start deploying those.”