T-Mobile's broadband strategy will focus on providing service to rural and underserved areas first (TMUS)

T-Mobile is launching a pilot for delivering in-home internet service using its wireless LTE network. The news comes on the heels of the company’s announcement earlier this month that it would enter the broadband market.

Number of Broadband Providers Rural North American Households Have Access To

The pilot is currently for existing T-Mobile customers and by invitation-only — that amounts to availability for around 0.04% of US households this year. The carrier hopes to expand the service to cover more than half of all US households with 5G by 2024, if it gets approval to merge with Sprint.

The merged company, New T-Mobile, would have a goal of servicing 9.5 million households by 2024.

T-Mobile has drawn back the curtain on its broadband strategy — it will focus on providing service to rural and other underserved areas first.

The company’s pilot will prioritize connecting 50,000 rural and underserved US households by the end of this year. One way it will get after that is by pricing the service below the current average cost of wired in-home broadband: The new broadband service will cost $50 per month, 29% lower than the average $70 per month rural customer currently pay for wired in-home broadband service, according to Strategic Networks Group. By 2024, the lower prices could amount to about $14 billion in yearly savings for US consumers.

We expect T-Mobile’s strategy will enable it to disrupt the US broadband market by tackling two major pain points for rural households: limited options and price. The company’s focus on rural and underserved areas will allow it to stand out from other broadband companies as there is limited competition: Nearly two-thirds (62%) of rural North American households lack a second option for wired broadband service. In areas where T-Mobile can provide an alternative, its planned $50 per month price tag will likely to help it win out: 70% of rural US households are dissatisfied with the current price of their broadband, for example.

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