Leichtman Research Group: Fixed Wireless Services Accounted for 90% of the Broadband Net Adds in 2022!
Leichtman Research Group, Inc. (LRG) found that the largest cable and wireline phone providers and fixed wireless services in the U.S. – representing about 95% of the market – acquired about 3,500,000 net additional broadband Internet subscribers in 2022, compared to a pro forma gain of about 3,725,000 subscribers in 2021.
These top broadband providers account for about 110.5 million subscribers, with top cable companies having 75.6 million broadband subscribers, top wireline phone companies having 30.8 million subscribers, and top fixed wireless services having 4.1 million subscribers.
LRG’s findings for 2022 include:
- Overall, broadband additions in 2022 were 94% of those in 2021.
- The top cable companies added about 515,000 subscribers in 2022 – compared to about 2.8 million net adds in 2021.
- The top wireline phone companies lost about 180,000 total broadband subscribers in 2022 – compared to about 210,000 net adds in 2021.
- Wireline Telcos had about 2.4 million net adds via fiber in 2022, offset by about 2.6 million non-fiber net losses.
- Fixed wireless/5G home Internet services from T-Mobile and Verizon added about 3,170,000 subscribers in 2022 – compared to about 730,000 net adds in 2021.
“Top broadband providers added about 3.5 million subscribers in 2022. Fixed wireless services (FWA) accounted for 90% of the net broadband additions in 2022, compared to 20% of the net adds in 2021,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc. “Total broadband net adds in 2022 were slightly lower than last year, and down from about 5 million in 2020, but were more than in any year from 2012-2019.”
FWA in the Spotlight:
A recent survey of some T-Mobile fixed wireless customers, conducted by the financial analysts at Wolfe Research, “T-Mobile Fixed Wireless Consumer Survey & Broadband Industry Implications,” found that 90% rated their service as “good enough.” The firm surveyed Facebook’s T-Mobile FWA user group, totalling over 15,000 members, in December 2022. Based on the 60 replies it received, 90% said they were mostly satisfied. The firm also found that 42% of respondents previously subscribed to a cable connection, 37% hailed from DSL operators, and 6% previously used fiber. Around 8% had no prior broadband service. Moreover, the financial analysts at Evercore expect T-Mobile to accumulate around 450,000 new fixed wireless customers in the first quarter of 2023, down from the 524,000 the operator reported in the fourth quarter of 2022.
Verizon added 262,000 residential FWA customers in Q4, up from +38,000 in the year-ago period, to end 2022 with 884,000 residential FWA subscribers. The company also signed on 117,000 business FWA subs in the quarter, up from +40,000 in the year-ago period, ending 2022 with 568,000 business FWA customers. About 70% of the consumer fixed wireless gross additions have come from bundling an existing wireless service, while 30% are new to Verizon. Interestingly, the experience is flipped for Verizon Business, where 70% of FWA customers were new to Verizon.
In contrast to the widely-held view that FWA is a “lower quality” service than wired broadband, Verizon says their principal selling point is FWA network’s greater reliability versus wireline alternatives. Cable’s outside plant issues can take days to resolve, a particularly critical issue in B2B, where cablecos (like Comcast Business) have increased their market share.
Image Credit: Verizon
The Wireless Internet Service Providers Association (WISPA) kicked off its annual trade show this week in Louisville, Kentucky, stating that WISPs service a total of 9 million Americans, many of whom live in the hardest to reach and serve parts of the country
According to Fierce Wireless, Cox is using 5G technology to test FWA services near Macon, Georgia; Tucson, Arizona; and Oklahoma City, Oklahoma.
|Broadband Providers||Subscribers at end of 2022||Net Adds in 2022|
|Total Top Cable||75,649,081||517,103|
|Wireline Phone Companies|
|Total Top Wireline Phone||30,798,458||(181,276)|
|Fixed Wireless Services|
|Total Top Fixed Wireless||4,098,000||3,171,000|
|Total Top Broadband||110,545,539||3,506,827|
* LRG estimate
** Includes LRG estimate of pro forma net adds
^ Includes the impact of a divestiture completed in October 2022
- TDS residential subscribers, includes 305,200 wireline subscribers and 204,800 cable subscribers
- Company subscriber counts may not solely represent residential households – about 6.5% of the total are non-residential
- Top broadband providers represent approximately 95% of all subscribers
- Net additions reflect pro forma results from system sales and acquisitions, reporting adjustments, and the addition of new providers to the list – therefore, comparing totals in this release to prior releases will not produce accurate findings
About Leichtman Research Group, Inc:
Leichtman Research Group, Inc. (LRG) specializes in research and analysis on broadband, media and entertainment industries. LRG combines ongoing consumer surveys with industry tracking and analysis, to provide companies with a richer understanding of current market conditions, and the potential impact and adoption of new products and services. For more information about LRG, please call (603) 397-5400 or visit www.LeichtmanResearch.com
T-Mobile and Cisco launch cloud native 5G core gateway
T-Mobile US announced today that it has collaborated with Cisco to launch a first-of-its kind cloud native 5G core gateway. T-Mobile has moved all of its 5G and 4G traffic to the new cloud native converged core which provides customers with more than a 10% improvement in speeds and lower latency. The new core gateway also allows T-Mobile to more quickly and easily test and deliver new 5G and IoT services, like network slicing and Voice over 5G (VoNR) thereby expediting time to market.
The T-Mobile US 5G SA core is based on Cisco’s cloud-native control plane that uses Kubernetes to orchestrate containers running on bare metal. The companies said this frees up more than 20% of the CPU cores.
It also uses Cisco’s 8000 Series routers, 5G and 4G LTE packet core gateways, its Unified Computing System (UCS) platform, and Cisco’s Nexus 9000 Series Switches that run the vendor’s Network Services Orchestrator for full-stack automation.
“T-Mobile customers already have access to the largest, most powerful 5G network in the country, and we’re innovating every day to supercharge their experience even further,” said Delan Beah, Senior Vice President of Core Network and Services Engineering at T-Mobile. “This cloud native core gateway takes our network to new heights, allowing us to push 5G forward by delivering next-level performance for consumers and businesses nationwide while setting the stage for new applications enabled by next-gen networks.”
With a fully automated converged core gateway, T-Mobile can simplify network functions across the cloud, edge and data centers to significantly reduce operational life cycle management. The increased efficiency is an immediate benefit for customers, providing them with even faster speeds. The new core is also more distributed than ever before, leading to lower latency and advancing capabilities like edge computing.
“Our strategic relationship with T-Mobile is rooted in co-innovation, with a shared vision to establish best practices for 5G and the Internet for the Future,” said Masum Mir, Senior Vice President and General Manager, Cisco Networking Provider Mobility. “This is the type of network every operator aspires to. It will support the most advanced 5G applications for consumers and businesses today and enables T-Mobile to test and deliver new and emerging 5G and IoT applications with simplicity at scale.”
The fully automated converged core architecture is based on Cisco’s cloud native control plane, optimized with Kubernetes orchestrated containers on bare metal, freeing up over 20% of the CPU (Central Processing Unit) cores. The converged core solution uses a broad mix of Cisco’s flagship networking solutions including the Cisco 8000 Series routers, 5G and 4G packet core gateways, Cisco Unified Computing System (UCS), and Cisco Nexus 9000 Series Switches with Cisco Network Services Orchestrator for full stack automation.
T-Mobile is the U.S. leader in 5G, delivering the country’s largest, fastest and most reliable 5G network. The Un-carrier’s Extended Range 5G covers 323 million people across 1.9 million square miles – more than AT&T and Verizon combined. 260 million people nationwide are covered by T-Mobile’s super-fast Ultra Capacity 5G, and T-Mobile plans to reach 300 million people with Ultra Capacity next year.
For more information on T-Mobile’s network, visit: https://www.t-mobile.com/coverage/4g-lte-5g-networks.
Cisco was part of T-Mobile US’ initial 5G SA core launch in 2020. This included the user plane, session management, and policy control functions. Those network functions run on Cisco servers, switching, and its virtualization orchestration stack.
This 5G work built on Cisco providing its packet gateway for T-Mobile’s 4G LTE mobile core, later adding its evolved packet core (EPC), and eventually virtualized the operator’s entire packet core in 2017. T-Mobile was also the first major operator to introduce Cisco’s 4G control and user plane separation (CUPS) in the EPC at production scale in 2018.
Cisco has also been core to 5G SA work by operators like Dish Network and Rakuten Mobile
T-Mobile sells Sprint wireline business to Cogent for $1
T-Mobile will sell its wireline business, acquired from Sprint, to Cogent Communications Holdings Inc for $1, while taking a $1 billion charge on the transaction. The deal includes a $700 million contract under which Cogent will provide transit services to T-Mobile for 4-1/2 years after the deal closes. Cogent and T-Mobile expect to close the deal in or prior to December 2023.
T-Mobile has been turning its attention away from the wireline business that includes assets from its $26 billion acquisition of Sprint Corp in 2020. The decline of Sprint’s wireline business has been astounding to this author. For years, Sprint was the leader in wireline technologies like X.25, Primary Rate ISDN, Frame Relay, ATM, Carrier Ethernet and MPLS. Their optical network was second to none and was used as a backbone network for many carriers, including AT&T.
The deal for the Sprint wireline assets, a unit formerly known as Sprint Global Markets Group, provides a range of services, including MPLS (Cogent plans to convert those to VPLS and WAN), DIA (dedicated Internet access) and transit, wavelength and colocation services. The unit generated roughly $560 million in revenues in 2021 and has about 1,300 employees. In North America, the unit operates approximately 19,000 long-haul route miles, 1,300 metro route miles, and some 16,800 route miles of leased dark fiber. Total wireline business revenue was $739 million last year, according to Reuters.
In the most recent earnings call, T-Mobile Chief Executive Michael Sievert said the company was no longer using Sprint infrastructure to support its wireless business and that an asset review was underway.
“We think that T-Mobile must be receiving some sort of discount on the IP transit services that they will be buying from Cogent contractually, and they will save on the costs that they’d otherwise have to keep, maintain and improve (the infrastructure),” said Michael Ashley Schulman, partner and chief investment officer at Running Point Capital Advisors.
For Cogent, the deal provides a U.S. long-haul network that could eventually replace its current leased network and help expand the company’s product set to consumers and enterprises.
Cogent expects its revenue base to be about $1.1 billion, or 180% of its current $600 million run rate, CEO Dave Schaeffer said on a conference call. He outlined several strategic benefits from the deal, noting it will increase its fiber footprint and boost scale in the DIA, transit, virtual private networks and colocation/data centers markets.
The deal also paves the way for Cogent to enter the North American market for wavelength sales, and compete with market leaders Lumen and Zayo. Cogent, which is also looking to enter the market for dark fiber sales, said it also stands to gain international operating licenses in India and Malaysia, where it has no presence today.
Among other benefits, Cogent will also acquire a legacy Sprint customer base of about 1,400 businesses that, it claims, fall outside Cogent’s typical customer profile.
Cogent expects to offer customers the ability to migrate from their legacy MPLS VPN solutions to modern Ethernet / VPLS or SD-WAN / DIA solutions for their corporate needs. Cogent also expects to facilitate the migration of netcentric internet access customers from the T-Mobile Wireline Business (legacy Sprint) AS1239 to Cogent’s AS174.
Cogent expects its revenue base, post-close, to be $1.1 billion, or 180% of its current $600 million run-rate. Cogent likewise expects its multi-year revenue growth post-close will be 5% to 7% annually, with targeted aggregate revenue of over $1.5 billion by 2028.
A newly formed direct subsidiary of Cogent will consummate the acquisition. Cogent does not plan to issue new debt or equity in order to finance the acquisition, and the transaction is not expected to be dilutive to Cogent’s existing stockholders. Cogent plans to maintain its current dividend per share, which is expected to continue to increase over time.
Morgan Stanley served as the financial adviser for Cogent, while Houlihan Lokey was T-Mobile’s financial adviser.
Musk’s SpaceX and T-Mobile plan to connect mobile phones to LEO satellites in 2023
During a live media event Thursday afternoon, T-Mobile’s Mike Sievert and SpaceX’s Elon Musk announced a new partnership that’s intended to connect T-Mobile sold phones to a new constellation of SpaceX’s Starlink satellites. The result, according to the companies, will be the elimination of all cellular dead zones around the U.S.
“It’s a lot like putting a cellular tower in the sky,” Sievert said, adding that the “vast majority” of T-Mobile’s existing phones would be supported by the service. Meaning, customers will not need to purchase new phones in order to connect them to Starlink’s second-generation satellites.
Sievert said that T-Mobile expects to offer the service for no additional charge on its more expensive plans. For customers on its cheaper plans, he said they may need to pay an additional monthly charge in order to be able to access satellite coverage.
Starlink’s satellites will use T-Mobile’s mid-band spectrum to create a new network. Most phones used by the company’s customers will be compatible with the new service, which will start with texting services in a beta phase beginning by the end of next year. The companies did not say when it might launch commercially.
T-Mobile CEO Mike Sievert at a joint news conference at Space X facility in Brownsville, TX
SpaceX has launched nearly 3,000 low-Earth-orbiting (LEO) Starlink satellites since 2019, handily outpacing rivals OneWeb and Amazon.com Inc’s Project Kuiper. Starlink recently suffered a major setback when the FCC rejected the company’s application for almost $900 million in government subsidies. The agency ruled that Starlink’s service likely wouldn’t be able to meet the agency’s speed and service requirements.
SpaceX’s next-generation Starlink satellites, the first of which are planned to launch on SpaceX’s next-generation Starship rocket whenever it is fully developed, will have larger antennae that will allow connectivity directly to mobile phones on the T-mobile network, Musk said.
Meanwhile, U.S telecom firms are in a race to build up the mid-band portion of their 5G networks to catch up with T-Mobile, which bagged a chunky 2.5 GHz of mid-band spectrum thanks to a buyout of rival Sprint.
Mid-band or C-Band has proven to be perfect for 5G, as it provides a good balance of capacity and coverage. T-Mobile said it aims to pursue voice and data coverage after the texting services beta phase.
Others in the Mix:
Satellite communications firm AST SpaceMobile Inc is also building a global cellular broadband network in space that will operate with mobile devices without the need for additional hardware. AST SpaceMobile is relying on SpaceX’s rockets to get its satellites into orbit, having pivoted away from a plan to use Russian rockets after Russia’s invasion of Ukraine.
“Elon [Musk] and Mike [Sievert, of T-Mobile] helped the world focus attention on the huge market opportunity for SpaceMobile, the only planned space-based cellular broadband network,” AST SpaceMobile CEO Abel Avellan wrote on LinkedIn yesterday. “BlueWalker 3 … is scheduled for launch within weeks!”
Meanwhile, Verizon and AT&T each have their own satellite plans: Verizon plans to use Amazon’s planned Project Kuiper satellites to connect its rural cell towers to the Internet, and AT&T is planning a similar setup with OneWeb’s own growing constellation of low-Earth orbit (LEO) satellites.
In 2020, AT&T agreed to let startup AST SpaceMobile use its Band 5 spectrum to test transmissions from its BlueWalker 1 satellite to devices on the ground. AST SpaceMobile is now hoping to launch its new BlueWalker 3 prototype later next month. However, as reported by SpaceNews, supply chain issues delayed the launch of AST SpaceMobile’s first operational satellite by about six months, to late 2023.
AST SpaceMobile’s main rival, Lynk, already has one operational satellite in orbit for phone connections. As noted by Ars Technica, the company is hoping to receive FCC approval to offer satellite-to-phone services across 35 countries by the end of this year.
“Elon said it’s hard, and it’s only been done in the lab, but Lynk has done it in space already,” Lynk’s Charles Miller told the publication yesterday. “We’re the only company in the world that has done that.”
Lynk hasn’t yet announced an agreement with a major U.S. network operator, though it has agreements with a number of international operators. Lynk tested its services in the U.S. with Smith Bagley, a tiny wireless network operator offering services under the Cellular One brand in East Arizona.
“There are significant regulatory hurdles to clear, as the FCC is reviewing SpaceX’s request to launch a constellation of 30,000 Gen2 satellites, while other LEO proposals including Amazon’s Project Kuiper (with whom Verizon is collaborating) and AST SpaceMobile (financial backing from Vodafone and a commercial agreement with AT&T) are also working DC as well as international agencies to put some rules in place for this latest chapter of the Space Race,” Raymond James analysts wrote in a note to investors.
UPDATE: Apple iPhone 14 text messages via Globalstar LEO satellites starting Nov 2022:
Emergency SOS: Apple iPhones to be able to send/receive texts via Globalstar LEO satellites in November 2022