T-Mobile Aims First Wireless Broadband Service at Rural Homes
Scott Moritz
Jul 09 2020, 12:13 AM Jul 09 2020, 1:34 AM July 09 2020, 12:13 AM July 09 2020, 1:34 AM
(Bloomberg) -- T-Mobile US Inc., taking a first step in its long-promised assault of cable and phone companies' landline businesses, is launching wireless broadband service to homes in rural areas.
For $50 a month, customers in three western Michigan counties can sign up for internet service with speeds of about 50 megabits per second -- enough bandwidth for a family to stream at least five different shows at one time. The offer requires auto pay, but there's no annual contract or data cap.
Cable providers and rural phone companies may shrug at the limited size of the offering, which builds on a pilot program. But the move makes T-Mobile a new competitor in home broadband.
T-Mobile previously took on wireless carriers Verizon Communications Inc. and AT&T Inc. by branding itself the "uncarrier" and eliminating two-year contracts. It also dangled free Netflix Inc. service to attract subscribers, putting more pressure on its formerly far-larger rivals. In the span of seven years, T-Mobile has grown from the smallest national carrier to No. 2.
Its latest growth spurt was fueled by the $26.5 billion takeover of Sprint Corp. in April. To gain approval, T-Mobile had to agree to several conditions, including the expansion of service to rural and underserved customers.
"We're just at the very, very beginning of seeing the incredible benefits of our combined network but the early signs are extremely promising -- particularly in rural America," Chief Executive Officer Mike Sievert said in a statement.
T-Mobile's broadband offer in Michigan consists of a 4G wireless signal beamed into a home, where a receiver creates an indoor Wi-Fi hot spot. The company says speedier 5G service will follow.
One of the central pitches of the Sprint deal was that the combination would accelerate the introduction of 5G. The companies pledged to Federal Communications Commission Chairman Ajit Pai that they would deploy a 5G network covering 97% of the U.S. population within three years and 99% within six.
Delivering on those promises, especially during a pandemic, may be tough. Already, the enlarged T-Mobile has faced a few challenges in its first few months. In June, it disputed the job-creation mandates and network-speed requirements imposed by California. A week earlier, as many as 68 million customers were hit with a daylong service outage, which drew a federal investigation. That same week, the company pushed pause on its T-Mobile TV venture, writing down $218 million of its value.