In December 2018, T-Mobile posted a video to YouTube, “The Carriers Who (Almost) Stole Wireless.” This was a telecom parody of “The Grinch Who Stole Christmas,” with the villains being three Grinch-like creatures who are greedy, cartoonish brutes who charge excessive taxes and fees. Of course, CEO John Legere swoops in on a flying sleigh, and his team rescues the residents of “Wirelessville,” so the story went.
It was a funny video, something not surprising from the brash “Un-carrier.” What was noteworthy about the video was the choice of villains. Two of the villains were obviously intended to represent Verizon and AT&T. The third villain clearly represented Comcast, not Sprint. At the time, T-Mobile was seeking regulatory approval for its purchase of Sprint, and providing internet competition with the cable companies was said to be a reason to approve the deal.
Wireless carriers launch push for internet service
T-Mobile is leading the charge on home internet competition, targeting a customer base of 500,000 by the end of 2021. The carrier is projecting 7-8 million home internet customers by the end of 2025. That’s real market share.
RELATED: T-Mobile cuts FWA home internet cost by $10, Verizon expands 5G home
Earlier this year, Verizon was the top winner of a major auction of C-band spectrum, spending $45 billion. The carrier is saying that it will cover 100 million people by the end of the first quarter of 2022. Just last week, Verizon for the first time announced that it now has 150,000 fixed wireless subscribers, a sign that its wireless adds will be an important metric going forward.
RELATED: Verizon adds 129,000+ wireline and fixed wireless subs in Q3 2021
AT&T is planning to have coverage of 200 million people with its C-band spectrum by the end of 2023. The carrier spent $23 billion in the C-band auction, which shows that AT&T is serious about this effort.
Why are the wireless carriers doing this now?
This push is largely occasioned by spectrum. T-Mobile acquired a king’s ransom of 2.5 GHz spectrum when the Sprint deal consummated. Sprint lacked the capital to fully deploy this spectrum.
For Verizon and AT&T, it’s all about the C-band spectrum. For all of Verizon’s hue and cry about Verizon 5G Home, I’ve been skeptical about the spectrum. I visited Chicago and tested Verizon 5G when it first launched in April 2019. The mmWave spectrum that Verizon uses is so high that its service radius and its ability to penetrate walls are both minimal.
RELATED: mmWave 5G real-world deployments will require very dense networks: report
C-band spectrum in the U.S. is generally in the 3.7-3.98 GHz range, which makes it mid-band spectrum. Unlike mmWave spectrum, signal propagations is decent, making a C-band rollout far more credible than a mmWave rollout. That said, T-Mobile’s 2.5 GHz spectrum is lower and will have been deployed across a population of 200 million by the end of this year. T-Mobile has a big head start.
The other reason is the rise of 5G, which narrows the speed gap with cable and is more than adequate to transmit HD video.
The cable companies are succeeding in wireless
Xfinity Mobile just reported record 3Q 2021 adds of 385,000 and has nearly 3.7 million subscribers. Spectrum Mobile reported strong ads of 244,000 lines in 3Q 2021 and now has 3.2 million subscribers.
Spectrum Mobile just launched family plan pricing of $29.99 per month for unlimited data, assuming two or more lines. This essentially matches the $30 per month per line pricing that Xfinity Mobile launched earlier this year. With wireless carriers emphasizing premium unlimited plans, there is room for the cable companies to undercut the national carriers on price.
RELATED: Spectrum Mobile slashes prices for unlimited wireless
My firm, Wave7 Research, indicates that this is a major competitive move from Spectrum Mobile. At Spectrum stores, we are seeing signage proclaiming this as “the best deal in mobile.” Spectrum Mobile is promising savings of “up to 60% on your mobile bill.” Advertising has been heavy and this new “The Best Deal in Mobile” TV ad has been airing very heavily. In it, a marching band introduces “the best deal in mobile.”
Tailwinds for the cable companies
The cable companies continue to open stores. The wireless carriers are closing stores.
The cable companies have certain advantages that allow them to do a great deal of advertising, and Wave7 Research has reported that advertising from these competitors is heavy. Also, they have large, established customer bases that can be persuaded to bring a phone over for savings. This can be done via email marketing, bill stuffers, store visits and direct mail.
Oh, and another cable company is expected to launch wireless services. Cox Communications is reportedly planning an MVNO, using Verizon’s network. Cox has more than 100 stores.
Where this gets complicated
There are a few complications here. First, in a sense, Verizon wins financially whether a customer chooses service from Verizon or from a cable company. Every time a cable company adds a wireless customer, Verizon earns wholesale dollars without the expenses of customer service.
Second, the cable companies are MVNOs now, but there are paths for that to change. Charter has stated that it plans to deploy thousands of small cells in early 2022 as part of a trial of significant size. Comcast has spectrum across most of its cable footprint. It is easy to imagine the cable companies eventually coordinating to build a national network, possibly via a deal with Dish Network. The more subscribers they have, the more such a deal would make sense.
For AT&T, this is a very complicated picture. Sure, AT&T has a lot of C-band spectrum and can use it to win subscribers nationwide. However, AT&T is also the incumbent phone company across nearly half of the U.S., so the carrier stands to lose some of its landline subscribers. In the Northeast, Verizon is in the same position.
This is good for competition
The demise of Sprint has been negative for wireless competition. The possible demise of TracFone will be negative for prepaid competition, if it is approved.
However, the table is set. Competition between the cable companies and the wireless carriers is getting real and this will escalate. There will be more and better internet options. And now, there’s a cable company offering $30/month unlimited lines in most major markets.
More choices will make for less Grinch-like behavior. Whether you live in Whoville or T-Mobile’s happy “Wirelessville,” that’s a good thing.
Jeff Moore is Principal of Wave7 Research, a wireless research firm that covers U.S. postpaid, prepaid, and smartphone competition. Jeff has 25 years of telecom industry experience, including 13 years of competitive intelligence work for Sprint. Follow him on Twitter @wave7jeff.
Industry Voices are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by FierceWireless staff. They do not represent the opinions of FierceWireless.