(Bloomberg) — T-Mobile US Inc. is cutting the price of its new 5G wireless home broadband service by 17%, stepping up efforts to steal internet customers from cable and phone companies.
The new price is $50 a month, down $10, T-Mobile said Tuesday in a post on its website. The six-month-old service is available to more than 30 million homes, but that’s just a fraction of the U.S. total.
Price cuts this early in the rollout of new 5G wireless services highlight the challenges of dislodging well-established phone and cable companies. Last month, No. 1 wireless provider Verizon Communications Inc. offered a $200 credit to new customers for its $70 a month 5G home internet service.
“T-Mobile’s price cut indicates a desire to be more competitive,” said Tammy Parker, an analyst with GlobalData. “There’s nothing that says a price cut has to be permanent, especially as market conditions change.”
Despite earlier supply constraints on routers, T-Mobile still expects to sign up 500,000 home internet customers this year, Chief Executive Officer Mike Sievert told investors last month. The company aims to have 7 million to 8 million home internet customers in five years.
Landline broadband is a prime target for competitors like 5G mobile carriers, as well as low-orbiting satellite companies including SpaceX’s Starlink and OneWeb.
5G, with its lightning-fast connections, seeks to disrupt the cable and phone industries by beaming internet service into data-hungry homes without the added costs of wiring and trenching. About 106 million subscribers get broadband from cable and phone companies at an average cost of $65 a month.
The price promotions follow a slowdown in sign-ups for internet service in late summer. Demand for broadband access surged around the country through mid-2021 as consumers rushed to rig homes for work and schooling during the Covid-19 shutdowns.
“Many people who needed to get broadband for the first time or increase their broadband speeds during the early days of the pandemic have already done so,” Parker said.
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