T-Mobile added 524,000 fixed wireless access customers in the fourth quarter, upping its base to 2.65 million subscribers for its still relatively new home internet product after just two years in the market.
Combined with Verizon Communications’s 1.45 million FWA customers, the two wireless giants have captured nearly 3% of U.S. home internet market share with what are still nascent services. Most of the growth has happened over the last 12 months, with T-Mobile tacking on nearly 1.7 FWA customers in 2022.
That's the good news for T-Mobile.
Not so good is that FWA's previously explosive expansion slowed a bit in the fourth quarter, dropping from 578,000 additions in Q3.
“While T-Mobile continues to show strong growth in fixed wireless, the rate of acceleration has clearly slowed," noted analyst Craig Moffett in a Wednesday morning note. "This matches our long-held expectation. We suspect that there remains a long runway for FWA in rural markets, but its application in urban and suburban can be expected to be limited by capacity constraints.”
Cable operators, who have seen their wireline broadband customer growth stall amid FWA’s sudden emergence, have stated all along that while 5G fixed wireless access services are indeed undercutting them, the speed and capacity of wireless networks won't be able to keep up with good ol’-fashioned DOCSIS cable once these FWA services get to scale.
There's also the issue of radio interference from large buildings, etc., etc.
Overall, analysts reacted favorably to T-Mobile's Q4 earnings, with Moffett adding: “T-Mobile’s 2023 subscriber guidance starts precisely where their 2022 guidance started, with an expected gain of 5.0 to 5.5M post-paid net adds. Their cash EBITDA guidance for 2023 calls for approximately a 10% YoY improvement. And their guidance for 2023 implies roughly 75% YoY free cash flow growth.”
Service revenue hit all-time highs of $15.5 billion for the fourth quarter and $61.3 billion for all of 2022.
You can read T-Mobile's earnings release here. ▪️
