T-Mobile appears to be eyeing a serious move into the U.S. fiber market, confirming plans to offer service in two Colorado cities in addition to its original pilot market of New York City. Open access networks could offer the operator one of the fastest ways to expand its fiber reach.
While open access networks aren’t nearly as prevalent in the U.S. as in Europe, they are slowly beginning to proliferate. Indeed, T-Mobile is working with an open access player – Intrepid Fiber – on its Colorado launch. But there are several other partners T-Mobile could team up with to build up its fiber business.
UTOPIA Fiber is one of the better-known open access players in the country. It recently inked a deal to deploy fiber to its 20th city in the state of Utah, and it has also partnered with entities in California, Idaho and Montana to help with fiber builds there. In the latter three states, UTOPIA is the construction and operational partner but the networks are owned by third parties.
Kimberly McKinley, UTOPIA’s CMO, told Fierce there’s nothing precluding it from working with T-Mobile and in fact, UTOPIA would “love to have discussions” with the operator about potential collaborations. One major question the pair would have to sort out, though, is who would own the fiber drop to each customer’s home.
Under its current model, UTOPIA owns the drop, McKinley said. This allows it to fully own the customer experience and enables users to switch between the ISPs riding on its networks with the click of a button. If T-Mobile owned the drop, it would be more of a hassle for customers to switch but would give the operator more control over the customer experience.
FierceTelecom asked T-Mobile whether or not it is seeking to own the fiber drop in its partnership deals, as well as for more color on how it views open access networks, but the operator declined to comment beyond what it shared with FierceWireless last week.
Though it would be outside UTOPIA’s norm to engage in an arrangement where it doesn’t own the drop, McKinley said nothing is off the table.
“We would love to have discussions and see what they have to say,” McKinley said, noting that the addition of fiber to its fixed wireless offering means T-Mobile now has a solid suite of broadband products. “They are being very savvy and agile and very aggressive in a market that usually has really big incumbents in them, so I’m super interested to watch what happens.”
Beyond UTOPIA, there’s also SiFi Networks, which has secured agreements to build fiber infrastructure in markets spanning 10 states. In November, CEO Ben Bawtree-Jobson told Fierce it was in active construction in 8 markets and that number was set to increase to 20 by the end of Q2 2023. Its website indicates work is underway in several markets in California, New York, Massachusetts and Connecticut.
Bawtree-Jobson also said at the time it had “experienced a strong uptick in Tier 1 operator interest in joining open access networks over the last 12 months.” However, it was not immediately clear whether this included wireless operators.
Elsewhere, Ubiquity Management has been building and buying open access infrastructure in underserved urban and suburban markets. These include markets in California, Texas and Arizona. Ting Internet has signed up as its ISP partner in California and Arizona.
Underline Infrastructure, which builds fiber-to-the-premises, is another option. That company already has a presence in two markets in Colorado, is preparing to break ground in one in California and is assessing more Colorado markets for expansion.
An operator representative told Fierce Underline currently has four ISPs on its network, including three full service and one business specialized ISP. It is “in active conversations with other service providers that could bring transformative value to our customers,” the representative added.
Looking ahead, AT&T is also planning to offer wholesale access to a fiber network covering 1.5 million homes which it is building via a joint venture called Gigapower with private equity firm Blackrock.
Other routes
Open access aside, T-Mobile could borrow a different page from Ting and become the ISP anchor tenant on municipally built and owned broadband networks. It could also tap into municipal-owned metro networks and build its own last mile fiber.
It’s also possible that T-Mobile could decide to fully build its own network or go the joint venture route. Deutsche Telekom, which now owns a majority stake in T-Mobile, is in the midst of a substantial fiber construction project in Germany and has also launched a joint venture to push fiber into more rural parts of the country.
In November, Bloomberg reported that T-Mobile was seeking a partner for a fiber joint venture worth as much as $4 billion. Analysts at New Street Research argued Frontier Communications would be a natural fit due to similarities in the companies’ cultures and market positions. Frontier has even borrowed terminology from T-Mobile, branding itself the ‘un-cable’ operator in a callback to T-Mobile’s ‘un-carrier’ branding.
Analyst thoughts
Asked for his thoughts on T-Mobile's latest move in Colorado, SVB MoffettNathanson's Craig Moffett told Fierce "All this still has the feel of an experiment." But it doesn't seem like Moffett thinks the experiment will find much success.
"They understandably want to see what the opportunity is for bundling wireless and wireline together, but there simply isn’t a path available for them to have anything more than a handful of FTTH lines in a handful of markets," he argued. "There’s just no opening anymore for anything remotely like a national footprint."