Massive MIMO, Multi-Carrier Aggregation, and FWA: A T-Mobile Case Study

T-Mobile’s Capital Markets Day 2024 led to many announcements, such as its new T-Priority network slice for first responders and the establishment of its AI-RAN Innovation Center in collaboration with NVIDIA, Nokia, and Ericsson. Another key announcement was the aggressive revision to its target for 5G Fixed Wireless Access (FWA) connections from 7 million to 8 million in 2025 to 12 million by 2028, as well as how its fiber network rollout will factor in to its strategy. A revision to FWA connection targets has been widely expected from both of the leading 5G FWA Mobile Network Operators (MNOs) in the United States, as both Verizon and T-Mobile have been on track, if not ahead of schedule, in meeting their previously stated targets for 2025. T-Mobile is the first of the two to announce its newest target, which is a 50% increase over its previously stated target of 7 million to 8 million connections.

T-Mobile’s model for reaching this new target requires no dedicated capital at scale. It has been utilizing a “fallow capacity” model—where unused spectrum in specific sectors is allocated as a potential FWA monetization opportunity. This model is updated nightly based on a variety of factors such as the new number of FWA connections and the changing dynamics of data consumption by consumers in said sector. Alongside the use of this model, a number of key drivers have helped T-Mobile set its new 12 million target:

• Advanced Network Technologies and Spectrum: Massive Multiple Input, Multiple Output (mMIMO) and multi-carrier aggregation are key technologies in creating a massive capacity network and have been coming onto its network faster than originally anticipated. Simultaneously, accelerated refarming and Auction 108 for the Federal Communication Commission’s (FCC) 2.5 Gigahertz (GHz) spectrum sell-off have had a big impact on T-Mobile’s ability to scale and increase capacity. The combination of increased bandwidth and better data handling capacity allows the network to manage more users with higher data needs. T-Mobile believes its FWA customers consume around 500 Gigabytes (GB) of data per month, and this has increased by 10% Year-over-Year (YoY).
• Customer Premises Equipment (CPE) Advancements: CPE has become much more spectrally efficient through innovations such as 8 Receive (Rx) antennas and can provide additional support and eligibility, and a comparable cost to older generations of 5G CPE that are available. T-Mobile plans to bring 8Rx CPE with the latest Wi-Fi 7 chips to customers in 2025 with an unnamed CPE supplier. However, based on recent device announcements from leading CPE vendors, such as Nokia’s latest FastMile gateway was announced with the North American market name checked as a target region, there is a strong likelihood that Nokia is the supplier for T-Mobile’s next wave of CPE, given their existing FWA relationship.

It is well documented that T-Mobile has utilized Fiber-to-the-Home (FTTH) as a supplement to its 5G FWA strategy and believes that it can convert several of its 5G broadband waitlist customers to its fiber offerings over time. It also set a target of surpassing 12 million to 15 million households through 2030 for fiber, which is driven by its investments in Lumos and Metronet, alongside its T-Fiber offerings. With both deals still pending, it is unlikely that any more deals will be coming down the pipeline anytime soon. T-Mobile’s strategy of FWA first and fiber second is in stark contrast with the vast majority of leading MNOs, which (due to being entrenched in existing fiber network rollout strategies) still see 5G FWA as a secondary focus for broadband connectivity. This is very likely to remain the same in the developed Western markets, and from a consumer perspective, the specific connectivity solution is not important, as long as the performance and reliability of the connection is satisfactory.

T-Mobile’s strategy is a very good case study for MNOs on 5G FWA monetization. However, it is important to note that it was able to adopt this strategy as T-Mobile itself did not have an extensive fiber presence, unlike its competitors—Verizon and AT&T. But there are some valuable lessons other MNOs can take from T-Mobile’s strategy:

• MNOs that do not have an extensive fiber presence or are in markets with poor fiber penetration, such as Latin America, can adopt a similar approach to T-Mobile. These regions are generally in the very early stages of 5G network deployment, and choosing to roll out advanced technologies from the beginning can lead to significant capacity becoming available, and allow the MNO to maximize the number of FWA connections their network can support. However, the high cost associated with such technologies and limited availability of 5G spectrum will cause challenges; therefore, prioritizing a cost-effective deployment of technologies such as mMIMO in rural areas with poor broadband connectivity, followed by network densification in urban areas.
• MNOs that have an extensive fiber presence and operate in markets with high fiber penetration, such as Western Europe, can adjust their strategy to be a hybrid model between their existing strategy and T-Mobile’s approach. Viewing FWA as a potential primary connectivity solution and not simply as a placeholder can help maximize the monetization of their 5G network. With Europe as an example, many MNOs have 5G FWA offerings in the enterprise market, rather than the consumer market due to lower data demands, but there is a much bigger addressable market in the consumer domain. Utilizing a similar “fallow capacity” model to T-Mobile can help MNOs strategically and carefully expand their FWA offerings without hurting mobile customer experiences, which will remain the clear priority. Simultaneously, utilizing such a model can help keep the churn rate low, something that Vodafone UK struggled with when it rolled out its offerings without sector-based targeting.