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T-Mobile overshadows Verizon, AT&T in LTE fixed wireless coverage

T-Mobile covers dramatically more households than either AT&T or Verizon when it comes to LTE fixed wireless services.

T-Mobile recently said it expanded its new LTE fixed wireless access (FWA) service to 20 million US households. AT&T said it expects to cover around 1.1 million locations by the end of this year with its own LTE fixed wireless service.

Verizon recently announced its LTE fixed wireless service covers "rural parts of 189 markets in 48 states," but a new analysis of the operator's offering calculates the actual number of homes covered by Verizon is around 2 million.

"To gauge service availability, we looked at a sample of ~200 locations spread across a dozen ZIP codes (including a mix of urban, suburban and rural areas, both in and outside the Verizon wireline footprint) where Verizon has announced the service would be available," wrote the financial analysts at Evercore in a recent note to investors. "We found the LTE Home service available in eleven of those locations, or ~6%. Assuming a similar availability across the whole list of available ZIP codes would imply the service is available to ~2M homes in the US at this point."

Verizon officials have declined to provide the exact number of customers covered by its new LTE fixed wireless service.

AT&T, Verizon and T-Mobile are among a large and growing number of fixed wireless Internet providers, ranging from the tiny to the massive. Such services have been touted as "the best growth opportunity in telecoms right now" considering the technology can be deployed relatively inexpensively in rural areas when compared with wired technologies.

Mobile vs. fixed profits

As the analysts with Evercore explained, fixed wireless LTE services are nowhere near as profitable on a per GB basis when compared with mobile LTE services.

"Broadly, Verizon can get ~$50/month from a mobile customer for ~10GB of utilization, so around $5/GB. A home broadband customer is likely to use 100GB or more (cable broadband customers are averaging well over 400GB), and generate $60 or less, so ~$0.60/GB at most, and likely much less than that. So, filling the network with home network customers at the expense of mobile customers paying 10x as much, wouldn't be an attractive use of network resources," they wrote.

However, they also cautioned that such calculations don't necessarily reflect the real-world workings of a wireless network. "Network capacity doesn't truly work like this; unless the network is at capacity, the variable network cost of an incremental customer is essentially zero," they explained. "In theory, a customer who uses 1GB/month, but uses it at peak times when the network is at capacity, could be more of a burden than a customer who uses 200GB/month, but only at off hours."

Changing demands

But it's also important to note that stay-at-home orders sparked by the pandemic are impacting this space. For example, a Wall Street Journal report citing data from network-monitoring company OpenVault found that US households consumed an average of 361GB in January, but that number rose to 383GB in September.

While neither T-Mobile nor Verizon apply concrete monthly data usage caps to their fixed wireless services, AT&T allots 250GB per month to its fixed wireless customers.

The LTE fixed wireless offerings from the nation's big wireless network operators will soon be overtaken by 5G-powered fixed wireless services. T-Mobile, for example, has estimated that 5.8 million households will use its 5G services for all their broadband needs (whether fixed or mobile) by 2021.

And Verizon continues to expect to cover roughly 30 million households with its 5G Home service running in its millimeter wave (mmWave) spectrum in the next five to seven years.

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

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