The three largest telecom companies in the nation, T-Mobile, Verizon, and AT&T, combined to add nearly 840,000 5G home internet subscribers in the fourth quarter, establishing the legitimacy of Cord Cutting 2.0 and posing a real threat to cable providers like Comcast and Spectrum.
T-Mobile was the clear winner of the trio, which all reported their fourth-quarter results this past week. T-Mobile added 541,000 customers in the period, while Verizon had less than half that amount with 231,000 customers. AT&T had the lowest tally with 67,000, but it just launched its service in full two quarters ago, and isn’t in as many markets yet.
When the earnings season is over and we get the final tally of all quarterly reports, T-Mobile will almost certainly have added more broadband customers than everyone else combined. It ended the year with 4.8 million broadband customers, making it a major ISP in just two years.
That’s a remarkable a result for 5G home internet service, which consumers are increasingly gravitating towards. Customers appreciate the simple pricing and easy setup process. For the carriers, the service runs on excess wireless capacity, and doesn’t cost much extra to run. While Charter and Comcast said it doesn’t feel threatened by the service, which it compares more to DSL, the numbers show a different story.
The same day that T-Mobile reported results, Comcast also reported losing 34,000 broadband customers — the second consecutive quarter in which subscribers declined. Charter Communications, which owns Spectrum, reports its results this coming week, and Altice will release its results later in February.
The question is whether 5G home internet service can sustain its momentum. T-Mobile is growing quickly, although its CEO, Mike Sievert, hinted at potential price increases. Earlier this month, it eliminated its promotional pricing, effectively increasing the rate by $10 to $60 a month. Sievert said he would look for price “optimization,” but said he would make sure the move would be accepted by consumers.
Verizon, which launched much earlier than T-Mobile and hasn’t seen the same success, will likely continue to tap the area for growth. Likewise, AT&T, which is years late to this game, is just starting to see its momentum build.
For cable companies, this could mean even more pressure as more consumers get access to 5G home internet.