Verizon brings ‘Cable Guy’ to Super Bowl party

If this year’s Super Bowl ads were any indication, this year’s big battle is wireless vs. cable in the contest for home internet customers.

Both T-Mobile and Verizon used their precious Super Bowl LVI advertising dollars to tout their 5G home internet services. And AT&T? It used the Super Bowl stage to boast its considerable clout in the public safety market through its FirstNet connections. But as far as home internet and cable competition goes, AT&T's emphasis is on fiber.

Verizon paid Jim Carrey to reprise his role in the 1996 movie “The Cable Guy” while T-Mobile tapped “Scrubs” alum Zack Braff and Donald Faison for a duet singing the praises of its home internet services – to the tune of “I Feel Pretty.” Of course, the winner of those ads is in the eye of the beholder.

Oh – and in case you missed it, Dolly Parton and her godchild Miley Cyrus asked everyone to “do it for the phones” and sign up with T-Mobile’s 5G. At one point, Cyrus refers to the maps – saying “the maps don’t lie,” comparing T-Mobile’s vast 5G buildout with Verizon’s skimpy coverage. Whether it’s hilarious or terrible – again, that’s all about individual taste.

For both Verizon and T-Mobile, their investment in the Super Bowl ads for home internet services signifies how serious they are about a relatively new market for both of them – at least, new in a 5G world.

Both T-Mobile and Verizon have made a point of explaining their investments in fixed wireless access as icing on the cake (no pun intended) because they’re essentially using capacity from their existing mobile networks rather than having to invest in a lot of new infrastructure. AT&T, once again, has been emphasizing its significant investment in fiber to serve this segment.

In fact, AT&T ran ads – in select markets – during Sunday’s game that featured Sophia Vergara in one ad and Mila Kunis and Demi Moore in another. (You read that right. For those following/not following along in celebrity gossip land, Kunis is married to actor Ashton Kutcher, who was previously married to Moore, and they’re starring in the same commercial. Scandalous! Or not.)

“I liked Verizon’s ad with Jim Carrey. It was well done and obliquely/directly targeted to cable competitors,” said Bill Ho, principal analyst at 556 Ventures. T-Mobile’s ad with the Scrubs alums also did a nice job with pushing the FWA message – short with memorable singing, he added.

“Stepping back, it’s the correct marketing move to make the audience aware of where those companies are banking on growth services,” Ho told Fierce. “It’s logical that the Super Bowl is the start of the ’22 campaign with additional related ads throughout the year to spur awareness.”

According to iSpot, Verizon spent an estimated $12.8 million on national TV ads during the Super Bowl in 2021. In 2020, it spent an estimated $17.7 million. No word yet on how much Verizon spent this year. Its biggest spend in recent years was in 2019, when it bought an estimated $20.4 million worth of ads during the game.

Lofty goals

While Verizon and T-Mobile are spending big ad dollars on the segment, some analysts are throwing a bit of cold water on their prospects.

T-Mobile is ramping up for 7 million to 8 million FWA subscribers by the end of 2025 with an addressable market of about 30 million homes.

For T-Mobile, it’s taking efforts to ensure it doesn’t oversell FWA. It’s placing a cap on the number of FWA customers it will accommodate, so once it’s sold FWA to a certain number of customers in a given area, that sector will be closed to new customers until someone churns off.

Analysts at the investment firm MoffettNathanson met with T-Mobile management in December where executives explained their FWA strategy.

“The math of acquiring 7-8M customers from an addressable pool of just 30M is daunting enough – it implies something between 23 and 30% penetration of addressable homes, an arguably absurdly ambitious target,” the MoffettNathanson analysts wrote in a report last month.

Part of the issue is ensuring that mobile customers, a “vastly more valuable” segment than FWA, don’t have their experiences impeded due to the FWA usage.

“The challenge for operators is to ensure that their FWA subscriptions fit as neatly as possible into the cell sites, or sectors of cell sites, with the most available capacity,” MoffettNathanson wrote. “No operator wants to risk their high-value mobile service experience for the benefit of a few incremental low-value fixed subscriptions.”

“It will be relatively easy to acquire FWA customers initially, when almost all cell site sectors are 'open,' but it will get harder and harder over time to match demand to precisely those pockets of supply where the network can safely tolerate loads of this magnitude. Again, one has to think about 10-year targets for capacity planning. All these are precisely the reasons, by the way, that AT&T has concluded that FWA isn’t a terribly attractive opportunity.”