T-Mobile is coming for America's cable internet giants

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T-Mobile (TMUS) made headlines on Wednesday announcing it’s giving away 5G phones in exchange for any mobile phone, but it’s the company’s new 5G home internet service that really deserves attention.

Called T-Mobile Home Internet, available in parts of 49 states, the service takes direct aim at the Comcasts (CMCSA), Coxes, and Charters (CHTR) of the world, promising in-home network speeds averaging 100 megabits per second with unlimited data and no caps.

“There's 30 million homes that are now eligible for T Mobile 5g high-speed internet,” Dow Draper, executive vice president of emerging products at T-Mobile, told Yahoo Finance. “That's basically one in five homes across the U.S.”

IMAGE DISTRIBUTED FOR T-MOBILE - T-Mobile CEO Mike Sievert answers caller questions during the T-Mobile Q4 and Full Year 2020 earnings call on Thursday, February 4, 2021 from Bellevue, Wash. Sievert said customers are choosing T-Mobile in record numbers because only the Un-carrier can deliver an unprecedented combination of value, product and experience leadership. The company was also recognized by J.D. Power for the best customer care in wireless for the 21st time. (Stephen Brashear/AP Images for T-Mobile)
T-Mobile CEO Mike Sievert answers caller questions during the T-Mobile Q4 and Full Year 2020 earnings call on Thursday, February 4, 2021 from Bellevue, Wash. (Stephen Brashear/AP Images for T-Mobile) · ASSOCIATED PRESS

The service, which costs $60 per month without yearly price increases compared to $39 per month for 12 months and $89 per month thereafter for a comparable Comcast plan, is one of a new generation of 5G home internet offerings. Rather than relying on a cable from a pole running to your home, 5G internet uses a carrier’s available 5G capacity to bring the internet into your house. You set up a router near a window, which pulls down the 5G signal that you can then share throughout your home.

Benefits over traditional internet providers

T-Mobile says the service provides a number of benefits over traditional internet providers, including speeds of 100 Mbps. T-Mobile also doesn’t have any data caps, a controversial strategy for home internet providers in which they charge consumers a fee for exceeding a preset amount of data downloaded or uploaded each month.

To be sure, most data caps are hard to hit — they can be as high as 1.5 terabytes, or 1,500 gigabytes. But as more people work from home and bring more devices in their homes online, data caps could pose a greater problem.

The cost of going over your cap generally amounts to $10 per each 50GB you use. To give you an idea of how much data that equates to, streaming Netflix in HD uses about 3GB of data per hour. While that means it would take 500 hours of streaming video per month before you hit the cap, that would actually only be a little over four hours of streaming a day per person for a family of four.

FILE - In this Feb. 10, 2021, file photo, Lear Preston, 4, who attends Scott Joplin Elementary School, participates in her virtual classes as her mother, Brittany Preston, background, assists at their residence in Chicago's South Side. Amid mounting tensions about reopening schools, the Centers for Disease Control and Prevention planned to release long-awaited guidance Friday, Feb. 12, on what measures are needed to get children back into the classroom during the pandemic. (AP Photo/Shafkat Anowar, File)
With more people working from home and schools still participating in remote learning, internet data caps can be a big problem for consumers. (AP Photo/Shafkat Anowar, File) · ASSOCIATED PRESS

Once you take into account huge downloads like patches for games that can be as much as 100GB, there’s a chance you might bump up against that limit.

While T-Mobile doesn’t have a data cap, it will slow down your internet speeds if connectivity in your area becomes congested. That, the company says, is not likely to happen, as T-Mobile Home Internet is currently limited to regions without huge populations.