2024 has shaped up to be a year of major acquisitions in the US broadband market. Verizon and T-Mobile, the two market leaders in the 5G fixed wireless market and in net new home internet subscribers, have set their gaze on further growth through fiber – with Verizon moving to acquire Fronter, the eighth largest residential ISP in the United States, and T-Mobile scooping up both Lumos Networks and Metronet/Vexus Fibers – in joint ventures with private equity firms.

What all three of these acquisitions have in common are their leading fiber networks, located in convenient complimentary areas, and high levels of customer satisfaction – Frontier’s pure-play fiber business has implemented a turnaround since the company exited bankruptcy several years ago, with its net promoter score (a measure of customer satisfaction) rising by 26 points between 2020 and 2024. Lumos Networks/NorthState (which merged in 2022) and Metronet/Vexus Fiber (which merged also in 2022) are similarly fast-growing fiber providers.

There are several key factors driving this trend. The US market – and broadband as a whole – has seen an increasing convergence of mobile and fixed broadband services, with cable MSOs such as Comcast and Spectrum launching MVNO services and making use of their Wi-Fi networks as backhaul for mobile devices while MNOs such as T-Mobile and Verizon moved to offer home internet over their 5G and LTE mobile networks (fixed wireless access, aka FWA). This convergence – as well as bundles of home and mobile service – have led to greater customer satisfaction, customer retention, and new business opportunities as customers increasingly expect their home and mobile service from the same company.

However, while 5G offers easy access to consumers in areas that previously lacked high-speed service, MNOs rely on an “excess capacity” model to fuel this growth – mobile subscribers are far more profitable per-line than home internet ones, and MNOs generally prefer them. Thus, home internet is only offered in areas where MNOs believe they have enough excess capacity in their networks to serve them well. Prior estimates from New Street Research have indicated that US MNOs only have capacity for 16M fixed wireless subscribers – and Parks Associates estimates they’ve already reached over 8.5M residential subscribers alone as of Q2 2024, and a growing number of small and medium businesses lines. In short, growth opportunities are limited for FWA.

Fiber, on the other hand, offers a highly reliable connection that can support multi-gigabit service – future proof for the coming decades. It is more expensive to build out, but offers many benefits. By acquiring established and rapidly growing fiber providers, Verizon and T-Mobile are preparing ahead to funnel their growth into the increasingly competitive fiber market.

For more insight on the changing competitive dynamics of the broadband and mobile markets, subscribe to Parks Associates Broadband Market Tracker.

For trending Net Promoter Scores and shifting uptake of home internet bundles with other home services visit Parks Associates Home Services Dashboard.