T-Mobile is eying a fiber broadband business, either through a joint venture or some other type of partnership, according to a Bloomberg report. If it happens, T-Mobile would join AT&T and Verizon as both mobile and fiber providers.
According to Bloomberg, T-Mobile is working with investment banker Citigroup to find partners to help build a $4 billion fiber network, targeting primarily residential homes. A deal is not imminent and it may not happen at all.
But if it does, it wouldn’t be surprising. There is a bit of a “fiber land grab” happening in broadband today, fueled by both government funding and private capital. Investors are clamoring to own fiber assets, which have attractive multiples right now.
Companies including AT&T, Frontier, Lumen, Charter, TDS, Brightspeed, Windstream, Altice, and hundreds of smaller independent operators and cooperatives are on a historic fiber expansion cycle.
T-Mobile competitors, including AT&T and Verizon, have the ability to bundle fiber home internet with mobile. Comcast and Charter can bundle mobile too, but with their HFC DOCSIS-based home internet.
Charter is getting aggressive with that bundling approach, having recently launched Spectrum One which offers 300 Mbps home internet with a mobile line for $50.
T-Mobile has entered the home internet business already with a fixed wireless service. I’m not a Wall Street analyst, but it’s pretty evident that a fiber residential subscriber is seen as much more valuable than a fixed wireless subscriber.
A fiber network would be advantageous to T-Mobile for wireless network backhaul as well, with T-Mobile leasing most of its fiber backhaul capacity today.
Perhaps a prelude to this potential move is a T-Mobile fiber project launched in New York City over a year ago, where the company partnered with Pilot Fiber on a FTTP network. That network targets MDUs in New York City.
Bloomberg also recently reported that AT&T is pursuing investment partners to expand its fiber footprint outside of its incumbent territory.
There really does seem to be a “fiber frenzy” going on. Our little county seat town of 400 people has one wireless ISP provider and will soon have two fiber providers to choose from, one being the cable TV system that was bought and is being re-built as a fiber ISP and the other being the local land-line telephone company. These are great developments for a small town.