Unserved and underserved markets comprise the majority of the opportunity that T-Mobile sees for the 5G fixed wireless broadband offering that the company expects to launch later this month, explained company executives at a virtual investor conference today.
The company also sees an opportunity to sell the offering in markets that already have competitive broadband choices. T-Mobile expects to have 500,000 customers for the fixed wireless service by the end of the year and to have 7 to 8 million customers for the service within five years.
The T-Mobile will not require a service contract on the 5G fixed wireless offering and the offering will not include equipment rentals or fees, explained Dow Draper, T-Mobile executive vice president of emerging products, on the webcast. Customers will install the required equipment themselves.
“They will plug in the router, download an app and go,” said Draper.
T-Mobile has tested the fixed wireless concept with an offering based on LTE technology in certain markets and has received very positive feedback from users on the offering, Draper said.
The company has just over 100,000 customers for the offering and has found that average customer usage is in the hundreds of gigabytes per month. Just over a third (35%) of pilot applicants had no previous relationship with T-Mobile, he noted.
T-Mobile Fixed Wireless Forecast
About 5% to 10% of the target customers for the T-Mobile 5G fixed wireless offering are in what Draper called “left behind” areas – smaller, more rural markets that have poor broadband options or no broadband options at all.
At least half and as much as 60% of the target market is comprised of households in areas with limited competition – just a single high-speed broadband provider.
The remaining 35% to 40% of T-Mobile’s target market is comprised of what Draper called “well served” areas where, according to Draper, the company expects existing T-Mobile mobile service customers to be attracted by the brand, by the ability to bundle services and by the company’s excellent customer service.
The rural areas are where T-Mobile would seem to have the greatest opportunity, however – for both its fixed and mobile offerings. While the company currently has about a 30% share of the wireless market overall, its share in rural areas is in the low double digits, according to the company. The company expects to see its share rise to about 20% in those areas within five years.
To support this goal, the company plans to open retail outlets in small and rural markets. In addition, the company has made deals with Best Buy and Walmart to carry some T-Mobile offerings such as Metro by T-Mobile.
Executives at today’s event didn’t detail whether these retailers would also sell the fixed wireless offering. They noted, though, that 1,000 of more than 2,200 Walmart locations that will carry T-Mobile are in rural areas.
The news about T-Mobile’s 5G fixed wireless plans comes just one day after Verizon raised its own 5G fixed wireless forecast and its own virtual analyst meeting. The company expects to get at least a 20% share of a 50 million-household addressable market by 2025 – a forecast that is quite similar to T-Mobile’s, although T-Mobile appears to be targeting broader geographic coverage.
T-Mobile said today that it expects to have mobile 5G available to 97% of the U.S. population by the end of 2022 and according to executives today, the mobile 5G network has plenty of capacity to also support fixed service.
Slides from the T-Mobile virtual analyst event are available at this link.
