The mobile operator has reportedly hired Citigroup to help it find a commercial partner through which to fulfil its fibre ambitions
T-Mobile’s focus when it comes to home broadband has long centred around fixed wireless access (FWA) offerings, leveraging its 4G and 5G mobile networks to provide in-home connectivity. Indeed, much like its rival Verizon, T-Mobile has found growing success in this space since rolling out its 5G network, hitting the recording its 1 millionth home internet customer back in April, with over 40 million homes covered.
“A lot of our customers on home broadband are coming in suburban and even urban areas from cable, which is fascinating,” noted T-Mobile CEO Mike Sievert on an investor call at the start of the year. “It’s not all just greenfield stuff where nobody has ever had an option before.”
T-Mobile now hopes to have seven million FWA subscribers by the end of 2025.
But while the rise of FWA has been impressive, the technology is not without its limitations, perhaps the largest of which is the strain it places on the local mobile network. A household using FWA for all its connectivity needs will require far more capacity than an individual mobile user, and the concurrent demand of multiple households can be significant. As such, an operator like T-Mobile can only afford to offer FWA services to a limited number of customers in each area, or else risk the performance of the local network for its more valuable mobile subscribers.
While additional spectrum could help alleviate this bottleneck in the short-term, the rapidly increasing data demand year-on-year means that the growth of FWA services will not be sustainable forever – at least, not in urban areas.
Gigabit-capable fibre, on the other hand, has no such limitations. Deploying a fibre network may be more expensive and time-consuming than deploying a FWA solution, it also offers customers improved reliability and performance, without applying additional pressure to the mobile network.
Last year, T-Mobile gave its first indications that it was considering entering the fibre market, launching a limited pilot program in New York City using an existing fibre player’s infrastructure.
While the success of this project has yet to be formally announced, the results presumably must be promising, with reports this week suggesting that T-Mobile has hired Citigroup to identify a potential partner for a fibre infrastructure joint venture (JV).
According to sources, the combined business could be worth up to $4 billion.
The details of T-Mobile’s fibre ambitions with this JV are not yet, including the structure and ownership of any joint business. The identity of potential partners have also yet to be revealed, though reports suggest that early discussions with potential investors are underway.
While this JV model has relatively little precedent in the US, investment in fibre infrastructure has been booming globally in recent years. In fact, the JV fibre model is proving especially popular in Europe, with new joint fibre efforts being launched earlier this year in the UK, Germany, and Belgium.
It is worth noting that T-Mobile’s largest rivals, AT&T and Verizon, already have fibre offerings of their own, recording roughly 6 million and 7.3 million subscribers, respectively, at the end of 2021.
In fact, AT&T was also reportedly last month as looking for a co-investor for a new fibre JV, with sources suggesting that the business could be worth $10–15 billion.
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