The big three carriers have all announced their Q3 numbers, which we covered in the Mobile Week in Review last week. But with Fixed Wireless Access becoming a significant part of each carrier’s strategy, it’s worth looking a little deeper at the numbers.
The top three carriers have a combined 14.6 million FWA subscribers, with T-Mobile leading (just shy of 8 million), Verizon with 5.4 million and AT&T (which only entered the market in 2023) bringing up the rear with 1.3 million. But when you look at the acceleration from zero, AT&T is clearly benefiting from consumer awareness of the service as the carrier saw a quicker initial growth compared to the other two carriers. It was short-lived though and one-and-a-half years into deployment, AT&T’s quarterly growth has fallen to similar (if not lower) growth compared to the other two carriers.
Of course, FWA is only a small portion of the carriers’ home broadband strategies. Fiber deployment is the ultimate goal, with an expected strategy of using FWA where fiber deployments would be cost-prohibitive, such as highly rural markets. Indeed, when you consider the most rural counties in the US (with more than 80% of a county deemed rural) only 64% of households have a fixed internet connection. The Internet penetration rate increases to 77% when you include mobile Internet solutions (predominantly smartphone access).
As a result, the key goal for all three carriers is a combination of fiber plus FWA and the carriers have all been on a spending spree, scooping up smaller fixed broadband carriers in a new race to expand the overall footprint. When viewed from that perspective, T-Mobile is trailing (although it is catching quickly) as both AT&T and Verizon have their fundamental roots in the fixed telecommunications world (remember when AT&T was referred to as “Ma Bell”?
So why does this matter and why are predominantly wireless-focused carriers looking at fiber to grow? Partially it is a bundling/loyalty solution: customers who buy both mobile and broadband from the same carrier are less likely to churn as it is a more complex move. Partially it was the swift kick that all three received by the cable companies, which have seen significant success with the launch of their mobile services. That forced the mobile carriers somewhat onto the defensive, with the need to counter CableCo’s bundled offerings with one of their own. And then there is the backhaul issue: faster mobile data services (think LTE and 5G) put an increased strain on the existing backhaul from the cell towers. That needs more fiber and there is an advantage to owning spare capacity already.
Whatever the root cause, the past 18 months has seen a new rush to pick up fixed assets that reminds me of the heyday of mobile, when smaller, regional players expanded through mergers to become the nationwide players they are today. Expect the acquisition trend to continue…