Fiber Could Bolster T-Mobile's Fast-Growing Home Internet Service: CEO

T-Mobile is considering how to use its growing fiber footprint to further bolster its Home Internet base, CEO Mike Sievert said on a call with investors late Thursday. T-Mobile earlier in the day unveiled a joint venture with infrastructure investor EQT (see 2404250047).

“Our fixed wireless strategy has always been about selling excess capacity where we predict normal cellphone usage won't suck up that 5G capacity and so this gives us the opportunity to serve broadband customers,” Sievert said. T-Mobile has said its strategy could result in 7 million to 8 million “total customers in terms of opportunity” and T-Mobile isn’t updating that number at this point, he said: “We're working on thinking about examining ways that we could try to extend that, and we haven't drawn any conclusions yet. We have to make sure it's done in an economical way, and we have to make sure it's done in a way that customers will love, and they have a fantastic product experience.”

Sievert said fiber could relieve “some pressure on the 5G network.” The carrier has a “long waitlist” of people wanting Home Internet, but who are ineligible because of limited network capacity, he said. T-Mobile added 405,000 Home Internet customers in Q1, down from 541,000 in Q4 and 523,000 in Q1 last year.

Consistent with statements from Verizon (see 2404220042) and AT&T (see 2404240054), Michael Katz, T-Mobile president-marketing, strategy and products, said it appears unlikely Congress will extend the affordable connectivity program. Katz noted that no postpaid customers, and only limited prepaid customers receive ACP funding. “These customers need another alternative, and we're working … to find them another alternative.”

Chief Financial Officer Peter Osvaldik said that in markets where Verizon and AT&T have installed C-band spectrum “the gap between us and them narrowed a little bit, even though we are still way ahead.” T-Mobile is the only carrier with three spectrum bands fully dedicated to 5G -- 2.5 and 1.9 GHz and 600 MHz, he said. That gives T-Mobile a “big advantage together with the standalone network and the larger deployment in the footprint that we have.”

Osvaldik noted that 90% of the carrier’s sites are 5G capable. T-Mobile said Thursday about 75% of its postpaid phone customers are on a 5G device (see 2404250066).

Sievert, like the CEOs of other major carriers, wasn’t asked about net neutrality after the FCC approved new rules earlier in the day (see 2404250004). T-Mobile has raised concerns about the treatment of 5G slicing (see 2402260058).

“As we have discussed multiple times, we did not think the order would have a material impact on revenues, margins, or opportunities,” New Street’s Blair Levin told investors. “The final order is consistent with that view.” He added the order appears “generally consistent with our anticipation, with a little bit of a question mark on network slicing.”

MoffettNathanson’s Craig Moffett said even though T-Mobile met subscriber targets and raised guidance, projecting 5.2-5.6 million postpaid net customers adds this year, up from 5-5.5 million, no one is celebrating. “Perhaps it’s because they just barely met consensus subscriber numbers. And even those were met only after adopting a dramatically sweetened free-iPhone offer in the waning days of the quarter,” Moffett said. The carrier's late moves “certainly don’t connote the easy achievement of the subscriber milestones that powered T-Mobile’s growth in previous years,” he said.