Wireless News in the US, this week (Oct 27)

Briefing Doc: Oct 27, 2024

Editor's Note: AI doesn't yet know to read 'mmWave' as 'millimeter Wave'; will fix in future episodes!

Key Themes:

• The "iPhone 16 supercycle" fizzles: Initial sales of the iPhone 16 have been underwhelming, failing to drive significant device upgrades for AT&T and Verizon in Q3. However, T-Mobile remains optimistic, attributing the slower adoption to the delayed rollout of key AI features, suggesting a potential for a delayed surge in upgrades.
• Fiber is the future, while 5G mmWave fades: T-Mobile is pivoting towards fiber internet, launching new fiber plans in select cities, recognizing the superior speed and reliability of fiber compared to fixed wireless. This aligns with the industry's trend towards fiber, highlighted by Verizon's aggressive FWA expansion plans using C-band and mmWave. T-Mobile is also abandoning its 5G mmWave expansion, citing limited use cases and performance issues, highlighting the industry's shift towards mid-band 5G.
• Broadband capex declines, but investment remains strong: Despite a 7.5% drop in capex in 2023, the broadband industry continues to invest heavily in infrastructure, driven by fiber deployment, network integration, and rising bandwidth demands. 
• FCC actions and regulatory scrutiny intensify: The FCC's decision to grant FirstNet access to the 4.9 GHz band, despite objections from T-Mobile and Verizon, underscores the ongoing battle for spectrum resources and potential legal challenges. Additionally, the FCC is increasing consumer protection measures, including broadband nutrition labels and investigating bulk-billing arrangements, signifying heightened regulatory scrutiny of the industry.
• Consolidation and M&A activity on the rise: The ongoing acquisition of UScellular by T-Mobile, accompanied by UScellular's spectrum sales to Verizon and other MNOs, exemplifies the trend towards consolidation within the telecom sector. This trend is further reflected in the private wireless space, with HPE acquiring Juniper Networks to strengthen its position in the market.

Important Ideas/Facts:

• T-Mobile embraces fiber: T-Mobile is launching new fiber internet plans starting at $55/month, offering speeds of 500Mbps and 1,000Mbps in select cities, recognizing the superior performance and reliability of fiber compared to 5G Home Internet.
• Verizon doubles down on FWA: Verizon plans to double its FWA footprint to 90 million homes by 2028, utilizing C-band and mmWave spectrum, aiming to reach 8-9 million FWA subscribers by 2028: "Fundamentally doubling down on fixed wireless is a good thing," said Roy Chua, principal analyst at AvidThink. (Verizon Q3 Earnings Call).
• Broadband investment continues: Despite a drop in capex, the broadband industry invested $94.7 billion in 2023, with USTelecom CEO, Jonathan Spalter, stating: “This data shows the U.S. broadband market is clearly working. Broadband competition is continuing to drive unprecedented value for U.S. consumers who are connecting at faster speeds and lower prices.” (USTelecom report)
• FCC grants FirstNet access to 4.9 GHz: The FCC's decision to grant FirstNet access to the 4.9 GHz band, despite strong opposition from T-Mobile and Verizon, could have significant implications for public safety communications and the commercial use of this valuable spectrum.
• FCC increases consumer protection: The FCC is implementing new consumer-protection measures, including broadband nutrition labels and investigating bulk-billing arrangements, signaling a more active role in regulating the industry and protecting consumer interests.

Thank you for listening!
-Mario Mejia