Speaking at the Morgan Stanley European Technology, Media & Telecom Conference yesterday, T-Mobile executives enthused about the surprising success of the company’s fixed wireless access (FWA) product and even hypothesized about some possible future technical innovation.
As of last count, T-Mobile has 2.1 million FWA subscribers and is marching toward its goal of 7-8 million subs by 2025.
T-Mobile President of Technology Neville Ray and CFO Peter Osvaldik both emphasized that the company’s FWA is a “fallow-capacity model.” Meaning that it is taking spectrum that was just sitting unused and making new revenue from it.
Ray said, “The incremental cost of serving those customers, I mean, is de minimis. 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.”
And Osvaldik said, “I couldn’t be happier from a business perspective on how to effectively capitalize on excess capacity and generate a tremendous amount of value for the company.”
But T-Mobile is regularly asked about capacity conflicts between its FWA home broadband service and its core mobile service. And yesterday was no different with Morgan Stanley’s Simon Flannery asking about that.
Ray said, “So from a capacity perspective…We make sure that we are always protecting our mobile — our traditional mobile wireless business, be that today or in the future.”
The company provides FWA on a sector-by-sector basis where there is available capacity. And Osvaldik said it keeps “a very dynamic list,” of the sectors and available capacity. And the list is “updated continually.”
There are some indications that T-Mobile may be looking at mmWave as a strategy to boost capacity in some sectors for FWA.
Yesterday, Ray gave credence to that speculation. He said, “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?”
Interestingly, he added, “Maybe it’s an overlay architecture on elements of the macro network that we have today in the right places where it makes sense.”
He said, obviously, any new technologies or FWA strategies would have to support the economics of the product. And he emphasized that today T-Mobile is leveraging its fallow-capacity model.
“Are there going to be opportunities for us to expand that business in different ways? We’ll see,” said Ray.
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