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14 March 2019

T-Mobile waves in-home broadband carrot as FCC uncovers new info

As T-Mobile USA finds itself in a familiarly sticky situation in sliding the Sprint merger past regulators, the uncarrier’s latest sweet talking speech surprisingly has taken a break from 5G; well, sort of. T-Mobile is proposing a new in-home broadband service priced aggressively enough to disrupt the broadband market as it has already managed so successfully in mobile.

In an FCC filing, T-Mobile has outlined plans for a New T-Mobile in-home broadband opportunity creating “a broad and deep network with fiber-like speeds and massive capacity” – benefiting both mobile wireless and fixed broadband services, primarily in rural areas of the US. The main pitch to the FCC though is that with New T-Mobile making in-home broadband an important part of the merged entity’s business plan, it will force incumbent broadband providers to lower prices and improve services.

Most significantly though, New T-Mobile notes how an in-home broadband service will complement and create increased revenue opportunities for its video distribution service.

There was a distinct sense of disappointment when T-Mobile revealed its reformed TV plans just last month, turning its potential for TV disruption down a notch by choosing content aggregator over offering its own undifferentiated skinny bundle. However, Faultline Online Reporter deduced that becoming an aggregator of the TV ecosystem is a role well-suited to T-Mobile given its major mobile reach and “hip” reputation – so offering an aggressively priced in-home broadband service to which it can throw in a TV bundle as an added extra should be a major disruptor of the “cableopoly,” as CEO John Legere describes it.

Unfortunately, the exact price of the in-home broadband service has been redacted from T-Mobile’s filing, although it does say the low price will bring average speeds in excess of 100 Mbps to 90% of the country by 2024 – by which time it aims to obtain 9.5 million subscribers. In addition, New T-Mobile promises no contract, no equipment charge, no installation charges and no nasty surprises. Further redacted facts and figures relate to the number of rural households today without an in-home broadband service or choice today, as well as the percentage of rural houses which could be supported by the New T-Mobile Home Internet service by 2024, should the merger get the green light.

Let’s say for argument’s sake the merger is approved and New T-Mobile Home Internet launches officially at the start of next year. That would give it a run rate of about 2.4 million broadband subscribers a year in reaching its 9.5 million 2024 target. Remember that’s 2.4 million homes a year which will most likely have a satellite TV subscription too – so an aggressively priced in-home broadband service all of a sudden becomes a triple pay package capable of disrupting several industries in multiple markets.

So, how will it work? T-Mobile plans to send subscribers a router hooked up to its 4G LTE network, which can be easily installed through an in-app guide through installation. Crucially for routers operating on mobile networks, users must find the prime location for connectivity within a home, something which is usually carried out by a field engineer, so this self-install method will be put to the test – in what we believe is the first of its type.

The New T-Mobile router will eventually be upgraded to the operator’s 5G capabilities after the first 4G LTE pilot, using 2.5 GHz spectrum and 5G compatible hardware, and both the 4G and 5G versions could feature mesh WiFi capabilities. Hardware will be made available to customers of the Home Internet service at no extra charge.

Home Internet is the latest flag being waved by T-Mobile in a series of attempts to butter up the FCC. Back in September, the onus was on 4K resolution, specifically relating to how T-Mobile’s Layer3 TV technology would be capable of delivering 4K content wirelessly nationwide through the combined capacity of New T-Mobile. It promises to use “immense capacity and coverage of New T-Mobile’s 5G network”. T-Mobile is known for having technologically advanced network infrastructure, but both Sprint and T-Mobile have hapless video offerings, which is why the purchase of Layer3 was so important – and is another reason why we believe T-Mobile’s content aggregator strategy could pay off.

It comes as the FCC paused the merger for a third time late last week, citing some as yet unspecified new information of high significance – marking the start of a three week investigation. According to Seeking Alpha, FCC Chairman Ajit Pai has met with legal representatives from both T-Mobile and Sprint – halting the countdown on day 122 of 180.