T-Mobile Cuts Home Internet Price by 17% to Dislodge Cable
(Bloomberg) -- T-Mobile US Inc. is cutting the price of its new 5G wireless home broadband service by 17%, stepping up efforts to steal internet customers from cable and phone companies.
The new price is $50 a month, down $10, T-Mobile said Tuesday in a post on its website. The six-month-old service is available to more than 30 million homes, but that’s just a fraction of the U.S. total.
Price cuts this early in the rollout of new 5G wireless services highlight the challenges of dislodging well-established phone and cable companies. Last month, No. 1 wireless provider Verizon Communications Inc. offered a $200 credit to new customers for its $70 a month 5G home internet service.
“The rapid price slashing for home broadband speaks to the needs for carriers to show Wall Street growth in broadband services,” said Maribel Lopez with Lopez Research.
Despite earlier supply constraints on routers, T-Mobile still expects to sign up 500,000 home internet customers this year, Chief Executive Officer Mike Sievert told investors last month. The company aims to have 7 million to 8 million home internet customers in five years.
Landline broadband is a prime target for competitors like 5G mobile carriers, as well as low-orbiting satellite companies including SpaceX’s Starlink and OneWeb.
Shares of wireless carriers have declined this year amid stiff competition for new customers, including giveaways of the new iPhone from Apple Inc.
T-Mobile, which is controlled by Deutsche Telekom AG and includes SoftBank Group Corp. as one of its top investors, was down 7% this year through Monday’s close, slightly better than Verizon’s 7.2% drop. AT&T Inc. is down 5.3% during that same period.
5G, with its lightning-fast connections, seeks to disrupt the cable and phone industries by beaming internet service into data-hungry homes without the added costs of wiring and trenching. About 106 million subscribers get broadband from cable and phone companies at an average cost of $65 a month.
The price promotions follow a slowdown in sign-ups for internet service in late summer. Demand for broadband access surged around the country through mid-2021 as consumers rushed to rig homes for work and schooling during the Covid-19 shutdowns.
“Many people who needed to get broadband for the first time or increase their broadband speeds during the early days of the pandemic have already done so,” said Tammy Parker, an analyst with GlobalData.
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