Why T-Mobile's Intrepid fiber deal with Brookfield is worth watching

T-Mobile recently expanded its fiber efforts into Pueblo and Northglenn, Colorado, following its initial launch of T-Mobile Fiber in parts of New York City in 2021. T-Mobile is working with Intrepid Fiber – a startup backed by global investment giant Brookfield Infrastructure Partners – in the two Colorado towns.

Jack Waters started Intrepid Fiber roughly a year ago with financial backing from Brookfield. Waters is a longtime telecom executive who previously held top positions at fiber operators including Zayo and Level 3 Communications.

Intrepid's strategy, he said, is "focusing on wholesale open access networks around the country." Meaning, the network will be open to other Internet providers to use, as long as they pay Intrepid's toll.

"We will engage with other household-name ISPs [Internet service providers] over time that want to sell fiber-to-the-home, as well as other services, to consumers," he said. "Right now, we are super excited to be working with our first ISP [T-Mobile]. We won't sell any services as Intrepid, at least anytime soon."

In speaking to Light Reading, Waters was careful not to say anything about Intrepid's financial backer (Brookfield) nor its first major customer (T-Mobile). He also didn't offer any firm details about Intrepid's expansion plans, including how many other markets the company might be eying beyond Northglenn and Pueblo, or how many total locations it might hope to cover with fiber. The company inked licenses with the two cities in Colorado last year.

"We have a large funnel of target markets," he said, adding: "Of course, we probably can't share that [list]."

Figure 1: Prospective customers can check the T-Mobile Fiber website to see if the speedy service is available at their location.
(Image source: T-Mobile)

Today, Intrepid counts roughly 20 employees, many of whom previously held leadership positions at the likes of Lumen Technologies, Comcast and Zayo. The company is working with a wide range of contractors, vendors and other companies to move its fiber network buildout forward. Nokia is Intrepid's optical vendor.

The Brookfield connection

Canada's Brookfield is a massive investment company, with roughly $800 billion of assets, that owns infrastructure in utilities, transportation, energy and communications all over the globe. In telecom, Brookfield's holdings stretch across 207,000 cell towers in India, France, Germany, Austria, UK and New Zealand; 46,600 kilometers of fiber optic cable in France, Brazil and New Zealand; and 881,000 fiber-to-the-premises (FTTP) connections in France and Australia.

In its latest filings with the SEC, Brookfield appeared to hint at its Intrepid fiber ambitions in the US.

"Our US fiber business will leverage our experience as a global developer and operator of best-in-class data transmission and distribution infrastructure to identify attractive markets and efficiently develop open access fiber networks while minimizing construction and operating risk," the company explained. "We have signed our first wholesale access agreement with an Internet service provider (ISP), which will serve as the anchor tenant for commercialization of the network in the initial markets. We anticipate that our long-term network utilization will be driven by a combination of our US fiber business typically being the sole fiber broadband provider in each expansion market and expanding our relationships with scaled ISPs."

Added Brookfield: "We believe our US fiber business is well-positioned to enter new markets in the US, where a significant number of households remain underserved or unserved by fiber-based broadband solutions. In addition to the construction of our two inaugural markets, we have compiled a backlog of attractive additional premises across the US that are best suited for fiber upgrades."

According to the FCC's new broadband map, the only two wireline Internet providers in Northglenn and Pueblo are Comcast (likely offering services through its DOCSIS hybrid fiber/coax network) and Lumen (offering services through its aging copper network).

And, according to survey data collected by Recon Analytics, customers in some of those locations are unhappy with their existing Internet providers and are looking for alternatives.

Importantly, Brookfield also acknowledged the billions of dollars allocated by the Biden administration for fiber networks in rural areas, and how that money could affect its efforts. T-Mobile officials too have indicated their interest in obtaining some of that funding. That funding is expected to be released starting next year.

At the end of 2022, Brookfield counted $7 million in fiber assets in the US, alongside a total of $5 million in operating expenses and $17 million in financing

An Intrepid approach

"We're just embarking on our journey," said Waters, Intrepid's CEO.

He explained that the company plans to build fiber using a mixture of aerial strands atop existing utility cables as well as through underground conduits. He said the network would use XGS-PON technology, allowing it to offer speedy services without much maintenance.

"We won't have to touch the network a lot while we grow," he said.

Waters said Intrepid is primarily targeting residential locations, but might expand to business locations in the future. That's noteworthy considering T-Mobile is also listed as a residential Internet provider in Northglenn and Pueblo via its growing fixed wireless access (FWA) business.

T-Mobile counts around 3 million FWA customers across the country, with plans to grow that to as many as 8 million by 2025. However, there are ongoing questions about whether FWA technology has enough capacity to compete with fiber and cable offerings over the long term. For example, AT&T officials have said that the company plans to focus on selling fiber instead of FWA due to such capacity concerns.

T-Mobile officials did not respond to questions about the company's fiber plans in Northglenn and Pueblo, including how much T-Mobile Fiber would cost in the cities and whether it would bundle its mobile offerings alongside its fiber connections. However, the financial analysts at Wolfe Research reported that T-Mobile would sell fiber for $10 per month less than AT&T's fiber prices, which start at $55 per month for 500 Mbit/s. It's also not clear how much capacity T-Mobile's FWA network has in the two cities – the company may be planning to replace overloaded FWA connections with a fiber alternative.

Reading the tea leaves

T-Mobile's deal with Intrepid is important because it's presumably built on the learnings the company has obtained so far from its work in New York City. Company officials have called T-Mobile Fiber in New York a test that would inform the company's broader strategic efforts.

T-Mobile's fiber partner in New York is Pilot Fiber. That company – founded in 2014 with funding in part from Foundry Group – focuses mainly on selling fiber to business users under its own brand.

T-Mobile's new deal with Brookfield's Intrepid comes just months after Bloomberg reported that the carrier was working with Citigroup to find financial partners for a potential $4 billion fiber joint venture. While that kind of a deal hasn't yet materialized, Brookfield would presumably be the kind of investment company T-Mobile could partner with.

Interest in such partnerships is at a high point. For example, late last year AT&T announced a joint venture with private equity company BlackRock Alternatives to build fiber connections to up to 1.5 million new locations. Those locations will sit outside of AT&T's existing 21-state wireline network footprint, thus representing an expansion of the operator's already extensive fiber buildout ambitions.

Moreover, AT&T's deal with BlackRock will also operate under an open access fiber model, with AT&T as the initial tenant.

According to Intrepid's Waters, the open access model is ideal for city governments because it will allow different ISPs to sell connections to consumers over time. Therefore, each ISP that wants to enter a particular market doesn't have to construct another new network in that community.

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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano