Wireless carriers Verizon, T-Mobile and AT&T can barely agree on anything. But during this week’s round of quarterly conference calls, their CEOs echoed the same sentiment: Bullishness around the potential of 5G home internet.
“People love what T-Mobile is serving,” T-Mobile CEO Mike Sievert said on a conference call Thursday.
“It’s performing well,” AT&T CEO John Stankey said on his conference call Wednesday. “It’s got…certain segments that are most attractive to that.”
“We have established a high pace of customer growth,” Verizon CEO Hans Vestberg said on his call on Tuesday. “It’s clear, fixed wireless access is here to stay as a proven competitive broadband product.”
The comments underscore the optimism that all of these companies hold in supplying 5G home internet as an alternative to traditional cable or, in the case of Verizon and AT&T, its own fiber offerings. 5G home internet, known in the industry as fixed wireless service, has quickly grown from one-off test markets to a legitimate business with loads of interested consumers.
“5G broadband competition is keeping cable companies on their toes and in many cases it creates a compelling financial alternative to pricey content and cable broadband bundles,” said Maribel Lopez, an analyst at Lopez Research.
On the flip side, things have looked dreadful for more traditional broadband players. Comcast lost 19,000 broadband customers in the period, while Spectrum added just 77,000 broadband customers.
“It looks like its easier for telecoms to sell wireless broadband to cable customers than it is for cable companies to sell mobile phone services,” Lopez added.
Sievert said he is getting most of his new subscribers from the cable industry.
But the carriers also have to walk a fine line with the service, which is why there have been no big nationwide launches. While there’s demand for 5G broadband, the carriers intentionally restrict some areas to avoid impairing their core wireless service.
“We’re selling our excess capacity,” Sievert explained, emphasizing that T-Mobile is investing in any new infrastructure solely to serve more home broadband customers. Sievert noted the company was also testing out deploying fiber itself, but is in the early stages.
Verizon and AT&T, meanwhile, need to pay attention not only to the impact on their respective wireless networks, but also how it affects its extensive traditional internet and fiber business. AT&T, in particular, is investing heavily in its Fiber service around the country.
While T-Mobile, and then Verizon, raced out ahead with their 5G home services, AT&T is just ramping up its own version, dubbed Internet Air.
That head start has helped determine their respective scale of business. T-Mobile dominates the market, having added 509,000 5G home customers in the fiscal second quarter, bringing its total to 3.7 million households. Sievert says he sees a potential market of 7 million to 8 million customers.
Verizon, meanwhile, added 384,000 5G wireless home internet customers, with a total of 1.4 million customers. The company plans to hit 4 million to 5 million customers by 2025.
AT&T is only in a few markets and hasn’t discussed its customers yet.
One of the big reasons why these companies are optimistic are the Net Promoter Scores, which charts how often consumers will recommend a service. Both Verizon and T-Mobile touts high scores that surpass cable, which traditionally has lagged behind most industries.
There’s an enthusiasm that comes with being able to get a modem in the mail and set up the service almost immediately. It’s a far cry from the long installation wait times and scheduling that comes with traditional cable or fiber optic service.
The more simplistic pricing that comes with 5G home internet service – which are free of contracts or exploding pricing plans – is also another key benefit. T-Mobile’s plans are a flat rate of $50, and Verizon charges just $25, although a price hike is coming later this summer.
But even a small boost likely won’t dampen interest in the service, especially with all three betting big on it.