Cable Companies and Mobile Carriers Battle Over Fixed Wireless Internet

In response, cable companies say they may be losing some battles, but in the end they’ll win the war—and that customers who have switched will return.

They point to people like Dylan Spring of the Albany, N.Y., area, who has tried both types of services. He dropped his Spectrum home internet service and started using T-Mobile US Inc.’s 5G-powered fixed-wireless service in 2021, when he was living in Albany. It cost half the price he had been paying for broadband.

When Mr. Spring first tried T-Mobile’s fixed-wireless service in 2019 he found the connection too slow. But with the new 5G-powered service, he says he didn’t notice any lagging or delays while gaming, streaming or working from home during the pandemic.

That changed this year when he moved to Rensselaer, the next city over. He found T-Mobile’s service was much slower in his new building—so he switched back to Spectrum, the broadband service from cable provider Charter Communications Inc.

Since 2018, wireless carriers like Verizon Communications Inc. and T-Mobile US Inc. have used the excess capacity on their fifth-generation cellular networks to lure broadband-internet subscribers away with 5G fixed-wireless plans that in some cases can cost half of what a cable plan does. As cable companies bleed subscribers to fixed wireless, they’ve harped on the cheaper service’s shortcomings in public rhetoric and TV commercials, in a phone-versus-cable tit-for-tat.

Not a Ferrari

With fixed-wireless plans, a subscriber uses an in-home receiver to pick up signals from a cell tower. A number of factors can hurt the web speeds, including network congestion, the receiver’s distance from the cell tower and obstacles such as trees between the receiver and the tower. Both T-Mobile and Verizon acknowledge these limitations on their websites.

An analysis of consumers’ broadband experiences by mobile-analytics company Opensignal Ltd. in November 2022 found that incumbent cable and telecom companies “typically comfortably beat" 5G fixed wireless. The study considered factors such as speed, consistent quality and video experience.

Yet the performance issues haven’t stopped consumers from migrating to 5G fixed-wireless service.

The new plans helped T-Mobile and Verizon sign up 2.8 million wireless-internet customers in 2022. Verizon, which reported earnings on Tuesday, said its consumer unit added 256,000 fixed-wireless subscribers in the first quarter of this year. Meanwhile, Comcast Corp., owner of Xfinity-branded broadband and cable services, and Charter have reported slowing subscriber growth, and have even lost subscribers in some recent quarters.

Both Comcast and Charter have identified competition from fixed-wireless plans as one of the key reasons for slowing subscriber growth. Both also have told Wall Street: Just wait, those customers will come back.

“Given the issues with fixed wireless, product reliability and scalability, we expect those customers to find their way to us over the long term," Charter Chief Financial Officer Jessica Fischer said on the company’s fourth-quarter earnings call in January.

“There’s a tranche of customers that are just looking for the lowest price out there," Jason Armstrong, Comcast’s chief financial officer, acknowledges in an interview. But he says Comcast already is seeing boomerang customers who have returned to broadband after growing frustrated with fixed wireless. “They’re coming back and forth all the time," he says.

While providers of fixed wireless don’t dispute that their product is inferior in some ways, they say it is more than adequate for many consumers.

T-Mobile Chief Executive Mike Sievert put it this way during the company’s fourth-quarter earnings call in February: “When somebody who is a fiber provider says, ‘You know that product is not as good as our product,’ it’s kind of like the people at Ferrari pointing a finger at the world’s bestselling car, Toyota, and saying, ‘We’re faster. We have the faster car.’ Yes, but Toyota is the world’s bestselling car. And that’s because—and if you look in the case of T-Mobile 5G home broadband—because it’s perfectly suited to what people want." Most of T-Mobile’s fixed-wireless customers are coming directly from cable plans, he said at the time.

Verizon executives have said they plan to deploy more C-band spectrum later this year, which should allow them to accelerate their fixed-wireless growth. C-band spectrum is an important swath of airwaves that help enable fast 5G speeds,along with broader coverage.

Dueling ads

As the battle for consumers heats up, the phone and cable companies have taken their tit-for-tat into viewers’ living rooms, trading barbs in splashy TV commercials.

Since the fall, Comcast has taken direct aim at T-Mobile with a string of commercials about families in therapy because of the problems they have experienced with internet-service quality since switching over to fixed-wireless service. In one commercial, a family is forced to adopt a nocturnal lifestyle to use high-speed internet, and begins to turn into vampires. In another, a couple that fell in love over a shared love of gaming has to transition to bird-watching because of lags in internet service.

T-Mobile fired back at Comcast and Charter with a Super Bowl commercial. With John Travolta singing to the tune of “Summer Nights" from the 1978 movie musical Grease, the commercial critiqued home-internet service that has to be laboriously set up by a technician who arrives in a “Specfinity" truck—a cheeky jab at the Xfinity and Spectrum brands.

For Mr. Spring, even though he is back with Spectrum home internet service, the arrival of T-Mobile’s wireless home-internet offering in Albany brought long-desired competition to the market.

“I think it’s a great way to get more competition in areas without having to do too much infrastructure," he says.