T-Mobile executives are leaving the door open as to whether they might pursue government funding to bolster the operator's new fixed wireless Internet service.
"We're certainly always optimistic," T-Mobile CFO Peter Osvaldik said at MoffettNathanson's 8th Annual Media & Communications Summit Thursday in response to questions on the topic. He added that he thinks T-Mobile's offerings are going to be "very well aligned" with federal efforts to cross the digital divide.
However, he said: "I think we need to wait for the details" before T-Mobile can commit to participating in any government program.
At issue is President Biden's proposal to funnel up to $100 billion toward broadband in the US as part of his bigger $2 trillion infrastructure package. According to a top Democrat, the bill could be debated as soon as July.
Although details of that $100 billion in broadband spending remain under negotiation, a portion would likely be allocated toward helping low-income Americans pay for broadband. Another portion likely would be set aside to finance the construction of broadband services in rural, unserved areas. T-Mobile's new 5G Home Internet service could be covered by both efforts.
Company officials have made clear that T-Mobile's service will be able to support "average" speeds of 100 Mbit/s. However, T-Mobile notes on its website that "customers will see average download speeds in excess of 100Mbit/s, and all eligible households will see average download speeds of 25Mbit/s or more." Based on the newest guidelines on broadband from the Biden administration, T-Mobile's fixed wireless Internet service could potentially be eligible for federal spending on broadband.
5G a 'tremendous opportunity'
In comments at Thursday's investor event, T-Mobile's network chief Neville Ray argued that wireless technologies in general should definitely be considered for federal funding.
Fixed wireless is "an incredible alternative" to wired networks, Ray said. "To exclude wireless … doesn't make any sense."
He continued: "It's a tremendous opportunity for the country and it's a tremendous opportunity for our business."
His comments likely are a response to arguments that federal spending on the digital divide should be directed toward fiber networks and not wireless networks.
Ray also addressed questions about whether T-Mobile's fixed wireless Internet service would be able to keep pace with users' home broadband demands. It's an important question considering OpenVault recently reported that around 14% of average home broadband subscribers now consume over 1 terabyte (TB) per month of data. That's far beyond the 12 gigabytes per month consumed by the average smartphone user, according to figures from Ericsson.
"Is that [usage] going to be uniform? No, it's not," Ray said of home broadband users consuming 1 TB per month in data. He said early users of T-Mobile's fixed wireless Internet service consume anywhere from 400 GB per month to 1 TB per month. He suggested the operator's network would be able to keep pace with such usage.
"We're pouring in that [network] capacity," he said, explaining that T-Mobile will be able to dedicate 160MHz of midband spectrum – and fully 300MHz of spectrum below 6GHz – to its fixed wireless service. Ray said T-Mobile will offer fixed wireless Internet offerings in locations where it has excess network capacity, "and in many areas it's hugely in excess."
T-Mobile's Home Internet service costs $60 per month and does not cap users' data speeds or usage. T-Mobile expects to count around 500,000 fixed wireless customers by the end of this year and up to 8 million customers within the next five years.
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