T-Mobile: Our churn is lower where Verizon has fiberT-Mobile: Our churn is lower where Verizon has fiber

T-Mobile's CEO said that the company will continue to pursue investments into fiber and fixed wireless. But he cautioned that the benefits from offering both wired and wireless services can sometimes be unclear.

"Some of our competitors talk about things like, we're investing in fiber because we have more share and more success where we have fiber," T-Mobile CEO Mike Sievert said Monday at the UBS Global Media & Communications Conference. "And then we went and looked at that and said, well, that's interesting. Where our two principal competitors [AT&T and Verizon] have fiber, T-Mobile also has more success, where they have fiber."

Continued Sievert: "Where Verizon says they have lower churn where they have fiber, T-Mobile has lower churn where Verizon has fiber. And so you have to be cautious about that kind of causality."

Both Verizon and AT&T have said they will significantly expand their respective fiber networks because they said doing so will help them gain more customers.

In his comments, T-Mobile's Sievert also downplayed the importance of wireless-wireline convergence in general. "It's here, it's been here for years," he said.

Sievert said that up to 85% of Americans can already purchase wireless and wireline services from the same company. He pointed to the mobile offerings from cable companies like Comcast and Charter Communications as an example. And he said that, as a result, converged wireless-wireline offerings from a single provider do not necessarily influence how people purchase their telecom services.

"The broadband is on auto pay, the wireless is on auto pay. Both these categories have a lot of meaning to you, and you're going to make the best choice for you on both of those," Sievert said. "And that's why we're building the best broadband business we can and the best mobile business we can."

T-Mobile leans into fiber

T-Mobile, of course, has focused much of its business on its 5G mobile network. But the company has also been testing the market for wired fiber connections.

The company launched its first fiber offering in New York City in 2021 with Pilot Fiber. Since then, it has expanded T-Mobile-branded fiber offerings to 32 markets across eight states via partnerships with the likes of Tillman FiberCo, SiFi Networks and Intrepid Networks.

More recently, T-Mobile's fiber appetite has grown more serious thanks to its investments into Lumos and Metronet. Lumos is the joint venture (JV) between private equity firm EQT and T-Mobile covering parts of the Mid-Atlantic including North Carolina, Virginia and South Carolina. T-Mobile has a similar agreement with KKR for Metronet to expand Metronet's fiber footprint in parts of 17 states.

And T-Mobile is also pursuing federal fiber funding in Louisiana via partnerships with Swyft Fiber and REV, two local fiber operators there.

Sievert said the operator has "an ongoing appetite" for those kinds of fiber transactions.

"It's limited, and we're going to be smart about it," Sievert said. "This is all about putting our brand to work."

Sievert said fiber network operators are typically able to sell their services to around 40% of the locations where they offer fiber connections. He said T-Mobile hopes to exceed that figure.

"The early [penetration] curves look very promising," Sievert said of T-Mobile's early fiber offerings, without providing details.

The fixed wireless angle

T-Mobile has said it expects to ultimately reach 12 million to 15 million locations with fiber via its agreements with the likes of KKR and EQT.

But the company is currently also offering fixed wireless access (FWA) services to a total of almost 6 million customers today over its 5G network. FWA is essentially an alternative to fiber that runs over a wireless network.

In September, T-Mobile forecasted it would expand its FWA business to 12 million customers by 2028, a 50% increase from its previous target of 7 million to 8 million customers by 2025.

Sievert said Monday that T-Mobile remains on track to reach its 12 million FWA customer goal without investing any more money into its 5G network.

Importantly, T-Mobile recently supercharged its FWA strategy by dropping its entry price to $35 per month – from a prior low point of $50 per month.

According to the financial analysts at Evercore ISI, T-Mobile's latest FWA pricing gambit "won't help" Comcast's efforts to kickstart growth in Comcast's core broadband business. Speaking at the same conference today, Dave Watson, the CEO of Comcast's cable unit, warned that the operator could lose up to 100,000 broadband customers in the fourth quarter of this year, more than most analysts had expected.