T-Mobile may not be a big fiber player right now but it's only a matter of time until that changes.
The company's approved and planned acquisitions should help it serve an estimated 5 million customers and generate revenue of $5 billion over the next five years, per insights from financial analysts at Evercore shared by Light Reading.
T-Mobile's fiber purchases should help it compete with the likes of Comcast and Verizon.
T-Mobile recently purchased fiber company Lumos.
Typically, companies that offer fiber services in locations already served by other providers only convert about 35 percent of customers that are potentially reachable by their network into paying customers. T-Mobile reportedly believes it can do better because of its strong national brand, digital and retail distribution system, and the waitlist for its 5G home internet.
T-Mobile's internal estimates are also a little more optimistic compared to Evercore's, with the company hoping to reach 15 million locations with fiber by 2030.
The company already offers fiber services in 32 markets through different partnerships.
Evercore expects T-Mobile to have a 10 percent market share within six months of new launches and 20 percent within a year. The company is forecasted to have a 40 percent penetration after two years, meaning 40 percent of potentially reachable customers will subscribe to its fiber internet.
The analysts also expect pricing to evolve as it acquires Metronet and Lumos' customers. The company doesn't shy away from going against the grain and disrupting markets, so we might see prices come down, initially at least. This could potentially affect revenue estimates but help will it win over customers.
At the moment, T-Mobile's fiber solutions are competitively priced. The company is also running a promotion to nab customers from rivals.
Companies that bundle wireless and fiber services, which is known as convergence, tend to hold on to their customers better and gain pricing leverage. The company's CEO Mike Sievert previously tried to downplay the benefits of convergence, which its competitors AT&T and Verizon are already enjoying. The warm welcome it gave to Lumos customers by extending the same benefits available to its wireless customers made it clear that it understood the stakes.
Evercore analysts believe that convergence will give the company a boost and help it attract more postpaid phone customers across the markets where it will offer fiber. More specifically, fiber can help the company attract 650,000 more customers every year and contribute $200 million to $350 million to its revenue.
Anam Hamid is a computer scientist turned tech journalist who has a keen interest in the tech world, with a particular focus on smartphones and tablets. She has previously written for Android Headlines and has also been a ghostwriter for several tech and car publications. Anam is not a tech hoarder and believes in using her gadgets for as long as possible. She is concerned about smartphone addiction and its impact on future generations, but she also appreciates the convenience that phones have brought into our lives. Anam is excited about technological advancements like folding screens and under-display sensors, and she often wonders about the future of technology. She values the overall experience of a device more than its individual specs and admires companies that deliver durable, high-quality products. In her free time, Anam enjoys reading, scrolling through Reddit and Instagram, and occasionally refreshing her programming skills through tutorials.
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