Wireless news in the US, this week (Dec 23)

Briefing Document: Dec 23 '24

Key Themes and Findings
Fiber Broadband M&A Surge Expected:

• 2024 M&A Activity: The fiber broadband sector witnessed significant M&A activity in 2024, including Verizon's acquisition of Frontier Communications for $20 billion, and Bell Canada's purchase of Ziply Fiber. T-Mobile also formed joint ventures to acquire Metronet and Lumos.
• 2025 Forecast: Analysts at PwC predict 2025 will see even more robust M&A activity, driven by a combination of factors.
• Drivers: These include: High amounts of available capital ("dry powder"), an evolving ecosystem, pent-up demand, and a potential shift towards deregulation, especially with the new administration.
• Targets: There are estimated to be around 400 smaller fiber providers in the U.S. that could be attractive acquisition targets, with 93% of executives believing consolidation is imminent.

T-Mobile's 2.5 GHz Spectrum Strategy:

• Historical Context: The 2.5 GHz band was initially allocated to educational institutions for broadcasting instructional TV. These entities later leased out "excess capacity" on those licenses.
• FCC Rule Change: A 2020 FCC ruling allowed these educational institutions to sell their licenses to commercial entities.
• Aggressive Acquisition: T-Mobile has been aggressively acquiring 2.5 GHz licenses in the secondary market, becoming a dominant player in this spectrum band.
• Financial Details: While T-Mobile has accumulated a large portfolio of 2.5 GHz licenses, the actual money spent is estimated to be significantly lower, as many of these licenses are tied to existing leases.
• Strategic Importance: The 2.5 GHz band is crucial to T-Mobile's mid-band 5G network and its competitive positioning.

Satellite-to-Cell Texting Expansion:

• First Nationwide Service: One NZ (New Zealand) has launched the first nationwide satellite-to-cell texting service in partnership with SpaceX's Starlink.
• Limitations: Initial service is slower than standard messaging, with delays of several minutes and is initially only supported by a limited number of devices.

Innovative Bill Reduction Methods:

• Ad It Up App: Metro by T-Mobile is introducing an app called "Ad It Up" that allows customers to earn credits towards their bills by interacting with the app (e.g., downloading and playing games).
• Potential for Zero Bill: This could potentially allow users to reduce their bill to zero, although it may require significant engagement with the app.
• Business Model: The app will include advertising, generating revenue for Metro by T-Mobile.

AI and Network Integration:

• AI-Powered Networks: Verizon is commercializing its first AI network in partnership with NVIDIA, combining 5G private networks with AI software platforms.
• Use Cases: This AI platform is designed to accelerate the development of AI applications and services such as video streaming, XR/VR, IoT, and robotics.

Spectrum's Wi-Fi Excellence:

• Wi-Fi NOW Award: Spectrum was awarded Best Wi-Fi Service Provider by Wi-Fi NOW.
• Key Features: Spectrum's Wi-Fi includes advanced network management tools, seamless connectivity for Spectrum Mobile users, and the deployment of Wi-Fi 7 routers.

Verizon Content Divestment:

• Shift in Strategy: Verizon has been moving away from content ownership, as demonstrated by the sale of its AwesomenessTV joint venture.

Thank you for listening!
-Mario Mejia