Fixed Wireless an Increasing Headwind to Fiber Growth

David Gray

April 3, 2025

Overall subscriber growth in the broadband industry is in decline. Despite this, fixed wireless providers T-Mobile, Verizon, and to a lesser extent AT&T, continue to take more share than other technology platforms, including fiber. FTTH operators can and should take action to fight back and to sustain subscriber growth.

When T-Mobile introduced its fixed wireless access product in late 2020, the financial markets and competitors weren’t certain what to make of the new offering, and whether it would have a tangible impact on the broadband business. To the extent that this service monetized unused capacity it seemed to make sense – but when push came to shove, many questioned whether T-Mobile be willing to trade off its relatively more profitable mobile business in any given market for its fledgling – and data intensive – 5G Home Internet service. And how effectively would this service compete – with its maximum download speed of 100Mbps – against the likes of FTTH providers, Comcast and Charter, all of whom offered download speeds up to 1Gbps at the time.

T-Mobile postcard targeted to eligible household

At first, T-Mobile’s Home Internet service wasn’t broadly available – initially consumers needed to provide their home address at tmobile.com and then wait to hear back – they were told they’d be contacted by the company in order to set up service, or to be placed on a waitlist. Reddit groups at the time abounded with posts about being wait-listed. But within a couple of months, T-Mobile had started its marketing machine and began to actively target customers in select geographies with direct mail, inviting them to try the new service and offering a $150 gift card. In 2021, T-Mobile generated nearly 100K Home Internet net adds in both Q1 and Q2, and by Q4 had doubled that pace. 

Verizon had already introduced its own 5G Home Internet product a couple of years earlier, though with more modest results. In 2018, the company deployed a limited launch in select neighborhoods in Los Angeles, Sacramento, Houston and Indianapolis. This market test relied on mmWave technology, which has limited range and ability to penetrate walls and other physical barriers (T-Mobile’s platform at the time utilized LTE/4G and Low-band 5G, which did not have the same limitations).

In 2019 and 2020 Verizon added a number of additional mmWave-based 5G Home Internet markets, but scaling was slow due to the heavy infrastructure demands of mmWave, which requires small cells every few hundred meters. In early 2021, given the attention generated by T-Mobile’s successful deployment and their clear momentum, Verizon significantly accelerated its efforts. In order to expedite, Verizon began installing C-Band equipment in early 2021 after acquiring spectrum licenses in an FCC auction. The initial rollout of its “5G Ultra Wideband” service was targeted to 46 markets and ultimately reached an addressable market of 100M by Q1 2022.

Throughout 2022 and 2023 both T-Mobile and Verizon aggressively marketed and grew their 5G Home Internet offerings, with T-Mobile generating well in excess of 500K net adds each quarter and with Verizon soon driving nearly 400K net adds per quarter. By 2024 both companies combined continued to generate nearly 800K net adds per quarter; AT&T – which launched its own 5G Home Internet product in 2023 – was driving an additional 100K+ net adds per quarter.

It's noteworthy that the growth generated by “fixed wireless” as a category began in earnest in 2022, just as growth within the entire broadband industry began to meaningfully decelerate.

Overall Broadband Industry Growth has slowed

According to MoffettNathanson (“U.S. Cable and Telecom: Broadband 2025” January 16, 2025) total broadband industry growth – including fixed wireless and GEO satellite – has been slowing for several years. As seen in this analysis, in Q3 2024 growth slowed from to 1.7% from 2.0% in Q2 – down a full percentage point from prior year.

A brief history of the ACP and why it matters

The industry slow-down in growth was led by cable – as the nation moved on from the COVID-19 pandemic and its distorting effects on the broadband marketplace. During the lockdowns of 2020, cable MSOs saw YoY subscriber growth of 6% - 8% as customer churn grinded to a halt – at the time there was literally no move activity, companies’ credit and collections processes became generally quite lenient, and consumers simply needed to maintain their service in order to remain in contact with employers, schools and the outside world. In the first half of 2021 the FCC rolled out the Emergency Broadband Benefit (EBB), a $50 monthly subsidy made available to qualifying low-income households, which was paid directly to service providers. EBB was replaced by the Affordable Connectivity Program (ACP) in January 2022, in which the monthly subsidy amount was reduced to $30, but eligibility was made available to a significantly expanded number of qualifying households.

When ACP enrollment was frozen in February 2024, according to USAC there were 23.3M participating households – it’s been estimated that nearly 45% of these were served by the top ten broadband providers in the U.S., which implies that when the program finally ended in June 2024, the likes of Charter (which disclosed in March 2024 that they served more than 5M ACP customers), Comcast, Verizon and AT&T faced a disproportionate amount of ACP “downside.” As subsidies were ended, impacted consumers would see $30 increases to their monthly bills (and in some cases would start seeing receiving bills for the first time). While service providers took a variety of actions to retain customers, a significant amount of disconnects – both voluntary and non-pay – took place over the second half of 2024 nevertheless.

Fiber growth is also slowing

In the same MoffettNathanson research note, Craig Moffett found the YoY subscriber growth rate for telco and independent FTTH operators during Q3 was 10.1% -- its lowest level since 2016. Importantly, this deceleration occurred despite the fact that a significantly greater number of new fiber homes were released in 2023.

Why is overall growth in decline?

I’ve addressed reasons for the slowdown in broadband industry growth previously, including in this blog post and in this interview. A major factor in broadband growth has always been new household formation. Briefly, this metric is a function of the economy (reflecting employment and mortgage rates and overall economic certainty), demographics, and migration and immigration patterns; in good times, the creation of new households always serves as a rising tide which lifts the boats of all broadband providers. However, last year the U.S. experienced the lowest rate of home sales since 1995. New household formation over the next decade is projected to occur at a slower rate versus other ten-year periods over the last 30 years. The slowdown is attributed to be a due to an aging population, declining birth rates and uncertain immigration patterns.

What does all of this have to do with FTTH growth?

For the last two years, fixed wireless as a category has consistently taken more broadband share versus other platforms. And while its growth rate has also decelerated over the last year, it’s still generating close to 1M net adds each quarter, implying a YoY growth rate more than 4X that of the FTTH category. And it’s a marketing juggernaut. It’s likely to continue to utilize increasingly aggressive offers in digital, direct mail, broadcast and streaming media in order to maintain their net adds.

Yet, when I speak with FTTH operating executives, and the leaders at the PE firms that back them, many (certainly not all, but many) are fairly dismissive of the impacts that fixed wireless is having on the business. I believe this sentiment is misplaced. It’s certainly true that the fixed wireless product doesn’t come close to the symmetrical speeds, reliability, and consistent performance of fiber – there’s no question there. But many consumers don’t care. If they can get a persistent $35 rate for service that’s generally regarded as sufficient (for example, T-Mobile’s “Rely” plan offers “up to” 318Mbps according to the broadband label), with a built-in discounted rate for an existing mobile relationship – that may be good enough. It’s certainly good enough for some to try out – especially if T-Mobile is offering a $300 Mastercard with purchase. Or free Hulu and Paramount+ packages. (Note: Neither of these sweeteners are currently offered with T-Mobile’s $50 “Rely” plan, which is discounted to $35 with purchase of a voice line – they’re offered with the slightly more expensive “Amplified” and “All-in” plans. But they could easily be to “Rely” at any time.)

One final point regarding the reliability and quality of the user experience – it’s worth noting that in spite of the rapid subscriber growth over the last few years, each of the MNOs have continued to increase their download speeds, according to Ookla.

What should FTTH providers do?

While the competitive landscape continues to change, there are a range of things that fiber operators should do to compete effectively, to drive growth and to achieve penetration goals. Unlike T-Mobile, Verizon or AT&T these are fundamentally local businesses. Their management and employees live, work and shop in the communities they serve. Techs' kids play on the football team and their spouses work in the grocery store. Leveraging this local presence effectively is something that many service providers have done quite successfully, wear as a badge of honor – and wield as a weapon. But doing this effectively takes a thoughtful, disciplined and consistent approach.

Similarly, direct sales programs are certainly local – no one can argue with that. When I attended Metro Connect in late February, several panelists at that conference told the audience that direct sales is a great way to grow customers, and if we don’t have a direct sales team we should get one. This puzzled me, because I happen to know that it costs a lot of money to pay commissions to hire a capable and qualified salesperson who can persist in a job that comes with a rejection rate that exceeds 95%. And that the success of that program depends on how effectively you manage that team (which, by the way, typically has an extraordinarily high attrition rate) and how you manage territory assignment. Make no mistake -- direct sales teams can absolutely deliver subscriber connects that are incremental to what all your other marketing is generating, when properly managed. But this channel has the highest cost per sale, and therefore when not properly managed, direct sales teams are a terrific way to waste a lot a money and drive a lot of subscriber churn.

Finally, direct mail is an area that should also be carefully reviewed. Address lists need to be refined and optimized – especially in rural areas, where mailability scores are typically significantly lower than urban and suburban areas.  Direct mail is a costly tactic, though well-run programs are common and highly cost-effective. List management, targeting and offer presentment are critical.

At the end of the day, a highly motivated Marketing and Sales team that’s well organized, with a solid playbook, and which is intent on winning can have a terrific impact on a local business and can ensure that business can be successful.