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10 May 2022

TMO extends Uncarrier tactics as FWA becomes key competitive arena 

Fixed wireless access (FWA) has become a significant feature of the US telecoms landscape, as analyzed in Rethink’s recently published report on the subject. Verizon and, to a lesser extent, AT&T led their 5G launches with FWA because they initially went live in millimeter wave bands, which do not lend themselves to mobile coverage. But what looked, at first, like a tactical way to get into the 5G market early, has turned into a full-blown strategy for Verizon, and FWA also took a larger role than before in T-Mobile USA’s most recent Uncarrier announcements. 


Even Dish Network is open to supporting FWA on its new 5G network, particularly to provide rural broadband and multiplay services. “I think there’s greater upside in fixed wireless than the loss … the bleed you might have in linear TV,” Dish chairman Charlie Ergen said on the firm’s most recent quarterly earnings call. “We think there’s certainly an opportunity for fixed wireless in rural America.” Although he would not divulge specific plans or timelines, Ergen commented of Verizon and TMO: “I think it’s very creative in terms of what they’re doing with FWA. But I think there are maybe other ways to do it, depending on where you are and the densities you have.” 


A potential asset for Dish could be its holdings in the 12 GHz band, which Ergen called an “ideal frequency” for FWA that could support “millions of customers” in rural areas. Indeed, Ergen’s new enthusiasm for rural FWA may be partly to persuade the FCC to rule on 12 GHz usage and to support Dish’s desire to run 5G in this band. Dish is the largest owner of this spectrum but has been engaged in a battle over its regulation, since 2016, with the low earth orbiting (LEO) satellite community, specifically SpaceX.  


In 2016, Dish petitioned the FCC to permit 5G services in the 12 GHz band, through sharing between mobile broadband and incumbent users. Such incumbents included Dish itself as one of the country’s big DTH providers, the other being AT&T’s DirecTV. SpaceX only came into the equation later with its alternative proposal to appropriate the 12 GHz band for its Starlink service, to provide broadband to underserved rural Americans. Dish countered that this would “permanently foreclose use of the band for terrestrial 5G” at a time when satellite TV was in decline and the SpaceX proposition would make inefficient use of that valuable spectrum. In February, the FCC seemed inclined to support Space X, though final decisions are not expected until later this year. 


Back with T-Mobile, the firm’s latest Uncarrier media launch, held last week, unveiled new pricing and service strategies for its FWA-based Home Internet offering, and a list of incentives to encourage sign-up. The aim is to attract more multiplay customers, which TMO can service from a single 5G network rather than separate fixed and mobile networks; to reach a goal of 8m FWA subscribers by 2025; and to position the operator as a challenger to ‘Big Internet’, just as it once successfully reinvented itself as the nemesis of the big MNOs, rather than a low cost player trailing in their wake. 


When TMO launched its Home Internet FWA service, it initially gunned for ‘Big Cable’ but now has its sights on Verizon, AT&T and other ISPs too. It claimed, as it launched new pricing under the slogan of ‘Internet Freedom’, that broadband customers are the least satisfied in the USA because of high fees, rigid contracts, sudden price increases and poor customer service. These were many of the criticisms the company made of its mobile rivals when it launched its Uncarrier campaigns, and since then, it has had a lot of success in gaining market share for itself, while also driving down prices overall in the market. 


To help achieve the same effect in broadband, prospective customers will now be able to test the Home Internet FWA service free for 15 days and if they decide to subscribe, TMO will even pay the early termination fee (ETF) for their existing ISP, up to $500.  


And TMO has also cut the price of its FWA service sharply, from $50 a month to $30 a month, but only for customers who also subscribe to its Magenta Max smartphone plan. This is the most notable step so far towards the operator’s promise of wireless-only quad play service bundles. According to TMO, a household can save up to $900 per year by adding Home Internet to a Magenta Max family plan for $30 a month, enabling the FWA line to be treated like any other new line added to the plan.  


The price changes also show TMO taking a leaf out of the cablecos’ book by leveraging fixed/mobile bundles to incentivize users to adopt both Internet and mobile services. Verizon also recently announced similar discounts for mobile users who took its FWA offering as well. 


The TMO price cuts also point to an increasingly competitive FWA market in the USA, which stands in sharp contrast with most countries, where fixed 5G is more frequently a rural or last-meter adjunct to fiber services, or a single-operator offering, rather than a key focus of operator competition. This was TMO’s second FWA price reduction in seven months, having cut the monthly  fee from $60 to $50 in October. 


TMO said it now covers 40m US households, or about 33% of the total, with FWA. It offered some other incentives to increase the percentage of this 40m that subscribe to its services. These include a $50 discount that FWA customers can put towards a new streaming device from Roku, Google, Apple or others; an offer of 50% off YouTube TV for a year; and an expansion of its smartphone loyalty program, T-Mobile Tuesdays, to FWA customers. 

The operator is targeting 8m FWA customers by 2025. By then, it may have expanded the capacity to support FWA by using its millimeter wave spectrum alongside the current midband deployment of both fixed and mobile 5G. It said it does not have any timeframe to use mmWave, but of course that might become necessary if fixed traffic is compromising performance for the more lucrative mobile services. Another option may be to use network slicing to separate FWA and mobile traffic, but the company says this is not yet necessary either, even though TMO’s average FWA customer is already using 300GB-400GB of data a month, and 10% are using more than 1TB.