T-Mobile’s Home Broadband Carrot

Not long ago, T-Mobile COO Mike Sievert said the company would start selling a wireless home broadband service. Now, it looks as though it has begun a pilot program of invited users. However, there is an important catch with respect to this new service: the motive behind it.

If it works and is priced well, and if it is popular with customers, it could compete successfully with wireline or wireless broadband from AT&T, Verizon, Comcast Xfinity, Charter Spectrum and others.

That’s why I applaud T-Mobile for this innovative move. This is another direction the industry is heading in, and I expect to see much more of this going forward. However, Sievert made it clear that growth with this new service will be possible only with a Sprint merger. That’s too bad. I think this kind of service could be good for T-Mobile and its customers with or without a merger.

In fact, I think Sprint should start offering the same kind of service. If the merger does happen, the two can join forces. If not, they can at least begin participating in this new growth wave separately.

Unfortunately, that doesn’t seem to be what T-Mobile has in mind. It sounds as though T-Mobile wants to use this new service as leverage to get the Sprint merger approved.

T-Mobile Doesn’t See the Forest

While companies often try to find some sort of advantage to get what they want, the problem here is that it seems T-Mobile can’t see the forest for the trees.

Not moving quickly into this new area simply because it’s a great next marketing move would be a mistake. We are likely to see many other competitors enter this space in the next few years.

In fact, AT&T Mobility, Verizon Wireless and other wireless carriers may enter this market in addition to offering their wireline Internet services. This could give them a major competitive advantage over players that don’t move in the same direction.

There will be many new competitors entering this wireless home broadband space. The wireless industry is going to change, expand and grow rapidly in coming years. This is just one way it will do so.

This is a real, long-term growth opportunity. That’s why I am so happy T-Mobile is making this move. That’s also why it would be a shame for T-Mobile to use this just as leverage to get its merger approved.

Sometimes, companies dangle carrots like this to nudge the approval process along. However, it’s also important to pull the camera back and look at this from a longer-term historical perspective.

Wireless Home Broadband Growth Opportunity

The center is shifting. Consider how industries change.

Competitors like Comcast Xfinity and Charter Spectrum used to be cable television companies. Today, they are Internet service providers that also offer pay TV, wireless phone with Xfinity Mobile and Spectrum Mobile, and more.

So, if this is the new direction of competitors in other industries, it also could be a real growth opportunity for many wireless carriers.

Offering wireless Internet to the home has quite a bit of growth potential. That’s why it would be shortsighted for T-Mobile to exit this new space prematurely if the Sprint merger should not be approved.

T-Mobile’s fixed wireless home Internet service will cost US$50 to $55 monthly, according to the company, and users could get up to 50 Mbps, but it likely would be slower during peak times. This service uses the T-Mobile LTE WiFi Gateway box.

I have not seen or tried this T-Mobile wireless home Internet service in action yet, so I cannot comment on its speed or quality.

However, I do think this is the right direction for the company to be heading in, with or without a merger. This is a new growth direction for broadband providers as the market continues to evolve.