T-Mobile Details Home Internet Service to Challenge 'Cableopoly'
T-Mobile released a few additional details about its plans to begin offering in-home Internet services over its wireless network -- a gambit that the company said will create a major challenge to the nation's cable companies but that is also carefully crafted to generate support for T-Mobile's attempts to gain federal approval for its proposed merger with Sprint.
"Home broadband is one of the most un-competitive industries in existence. The New T-Mobile & 5G can and will change all that," wrote T-Mobile CEO John Legere on the company's website. ("New T-Mobile" is the name the companies have given to the anticipated, merged Sprint and T-Mobile.) "T-Mobile will soon begin a pilot of Home Internet service using a 4G router operating over T-Mobile's LTE network. Customers will get the router for free, and after the merger, it will be upgraded to include 2.5 GHz spectrum and 5G compatible hardware. The New T-Mobile is coming for you, Cableopoly... you've been warned!"
T-Mobile announced early last month that it would begin testing a fixed wireless LTE service as a way to prepare for a more serious fixed wireless play that is contingent on its merger with Sprint. The company said that, if it successfully merges with Sprint, it will be able to offer average speeds in excess of 100Mbit/s to 90% of the country by 2024, and that it expects to garner roughly 10 million customers to the service by 2024. But T-Mobile said that, if it does not merge with Sprint, its fixed wireless plans are "limited... at best."
And, in T-Mobile's lengthy filing with the FCC on the topic, the company provided a number of new details about how it will roll out its "Home Internet" fixed wireless Internet service:
- The company first will determine locations where it has excess network capacity to support the service. In areas with limited capacity, T-Mobile will sell the service through direct marketing. In markets with more capacity and broader coverage, T-Mobile will sell it through retail stores and broad advertising.
- Customers who sign up for the service will get a free router that they can plug into an outlet inside their home. An app from T-Mobile will tell them the best place to put the router. The router will broadcast a WiFi signal inside the home, and will backhaul customers' traffic through T-Mobile's network.
- T-Mobile also said it would offer video services through its service. "Coupled with Home Internet, Layer3 will provide a supercharged content distribution platform providing packages with more than 275 HD channels, a growing selection of 4K video, and in-home digital video recording to homes across the country," the company wrote, adding that "reliable 4K streaming requires download speeds of approximately 25 Mbps and, as we have discussed, 25 Mbps will be the minimum speed for customers of the Home Internet Service."
T-Mobile said the service would be profitable, and also "protects and enhances revenues from the core mobile wireless service as well as from New T-Mobile’s video distribution business. Simply stated, the Home Internet business monetizes available spectrum capacity and assets to produce a financially attractive source of revenue."
However, critical information about the offering was redacted by T-Mobile in its the filing, including how much it would charge for the service, what kind of strain it would put on T-Mobile's network and whether it would impose usage stipulations like AT&T does (215GB per month) with its fixed wireless service. (Interestingly, T-Mobile did note that cable company Altice USA reported an average monthly data usage per household of around 250GB in the fourth quarter, while Comcast's median data usage in December was 174GB.)
This isn't the first time T-Mobile has talked about its plans to challenge the cable companies with in-home broadband if it successfully merges with Sprint. The companies didn't include their Home Internet plans in their April merger announcement, but did add those plans in June of 2018.
T-Mobile's latest announcement about its plans to challenge the 'Cableopoly' can be viewed as an attempt by the company to carefully nudge federal regulators to approve T-Mobile's proposed merger with Sprint. In recent months some analysts have begun to see clouds building over the transaction as evidence mounts that some federal and state regulators might move to block the deal.
For example, in just the past few weeks several dozen Democrats signed a letter to the FCC urging the agency to block the merger because it would "kill American jobs, reduce competition in the already highly concentrated wireless market, and raise prices for consumers."
Separately, a partnership of mayors and community leaders across roughly 200 cities, called Next Century Cities, joined the 4Competition Coalition's opposition to the proposed Sprint/T-Mobile merger.
And, according to Bloomberg, several state regulators including Maryland Attorney General Brian Frosh took the unusual step of speaking out against the Sprint/T-Mobile transaction.
However, Fox Business reported that White House economic and national security policy makers have given their approval to the merger, and that the Justice Department is still at least a month away from a decision on the topic.