T-Mobile is coming for America’s cable internet giants

T-Mobile (TMUS) made headlines on Wednesday announcing it’s giving away 5G phones in exchange for any mobile phone, but it’s the company’s new 5G home internet service that really deserves attention.

Called T-Mobile Home Internet, available in parts of 49 states, the service takes direct aim at the Comcasts (CMCSA), Coxes, and Charters (CHTR) of the world, promising in-home network speeds averaging 100 megabits per second with unlimited data and no caps.

“There’s 30 million homes that are now eligible for T Mobile 5g high-speed internet,” Dow Draper, executive vice president of emerging products at T-Mobile, told Yahoo Finance. “That’s basically one in five homes across the U.S.”

T-Mobile CEO Mike Sievert answers caller questions during the T-Mobile Q4 and Full Year 2020 earnings call on Thursday, February 4, 2021 from Bellevue, Wash. (Stephen Brashear/AP Images for T-Mobile)
The service, which costs $60 per month without yearly price increases compared to $39 per month for 12 months and $89 per month thereafter for a comparable Comcast plan, is one of a new generation of 5G home internet offerings. Rather than relying on a cable from a pole running to your home, 5G internet uses a carrier’s available 5G capacity to bring the internet into your house. You set up a router near a window, which pulls down the 5G signal that you can then share throughout your home.

Benefits over traditional internet providers

T-Mobile says the service provides a number of benefits over traditional internet providers, including speeds of 100 Mbps. T-Mobile also doesn’t have any data caps, a controversial strategy for home internet providers in which they charge consumers a fee for exceeding a preset amount of data downloaded or uploaded each month.

To be sure, most data caps are hard to hit — they can be as high as 1.5 terabytes, or 1,500 gigabytes. But as more people work from home and bring more devices in their homes online, data caps could pose a greater problem.

The cost of going over your cap generally amounts to $10 per each 50GB you use. To give you an idea of how much data that equates to, streaming Netflix in HD uses about 3GB of data per hour. While that means it would take 500 hours of streaming video per month before you hit the cap, that would actually only be a little over four hours of streaming a day per person for a family of four.

Once you take into account huge downloads like patches for games that can be as much as 100GB, there’s a chance you might bump up against that limit.

While T-Mobile doesn’t have a data cap, it will slow down your internet speeds if connectivity in your area becomes congested. That, the company says, is not likely to happen, as T-Mobile Home Internet is currently limited to regions without huge populations.

A push for faster internet in rural areas

Outside of serving as a competitor for traditional internet service providers, T-Mobile is marketing its T-Mobile Home Internet as an option for Americans living in rural areas who lack access to infrastructure necessary for high-speed internet via cable connections.

While it’s difficult to know exactly how many Americans lack internet access, acting FCC Chairwoman Jessica Rosenworcel has estimated the number of Americans without high-speed internet could be close to 100 million. T-Mobile’s service could help reduce that number by offering high-speed internet in rural areas, as well as urban regions where it hopes to boost competition.

“We do see this as an alternative to all of those technologies, DSL, cable, fiber,” Draper said. “And what we’ve seen from our pilot is, especially in rural areas, we’re getting unbelievable accolades where people are just, their minds are literally blown with the types of speeds they can get in their home versus the one to three megabits per second, that they’re getting from their service today.”

T-Mobile isn’t the first carrier to offer in-home 5G. Yahoo Finance’s parent company Verizon (VZ) has a similar service, without data caps and speeds as high as 300 Mbps, three times as fast as T-Mobile’s. But Verizon’s is also $10 more per month more than T-Mobile’s.

The other major mobile carrier, AT&T (T), doesn’t have a home 5G internet offering.

If you’re looking to ditch your current cable internet provider, your best bet is to ensure you actually have access to 5G home internet.

The company says it will roll out its home internet offering as it increases 5G capacity across the country. To see if you’re eligible for T-Mobile’s service, you can visit the company’s site, which will let you know if you can sign up.


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