T-Mobile US
RWA, CWA and EchoStar file FCC petitions against T-Mobile’s acquisition of UScellular
The Rural Wireless Association (RWA), Communications Workers of America (CWA), and EchoStar (owns Dish Network) all filed FCC petitions requesting the agency reject T-Mobile’s proposed acquisition of “substantially all” of UScellular’s wireless operations, including some spectrum.
The proposed transaction would remove UScellular from the U.S. telecom market, thereby eliminating one of the last few remaining regional wireless network operators and strengthening T-Mobile’s position across the 21 states where UScellular maintains operations.
Public interest and consumer groups (include Public Knowledge, New America’s Open Technology Institute and Community Broadband Networks Initiative) also opposed approval. They argued that the proposed merger between T-Mobile and UScellular would “result in the loss of the fifth largest marketplace competitor with a network covering approximately 10 percent of the country’s population, reallocate spectrum resources predominantly to the three top wireless carriers only to make it nearly impossible for a fourth competitor to emerge in the market, and waste valuable funding secured for building out 5G networks.”
The deal is relatively small as telecom mergers go — valued at about $4.4 billion, including $2 billion in assumed debt — but has ignited substantial opposition. UScellular is the nation’s fifth-largest wireless carrier.
“T-Mobile is asking for the commission’s blessing to further entrench its dominance over the wireless voice and broadband markets, making it harder for others (like EchoStar) to compete. The commission should deny this transaction, which threatens to substantially harm competition while offering only illusory public interest benefits,” EchoStar wrote in a new filing to the FCC.
“The merger would substantially lessen competition in local markets where UScellular operates, hurting workers, consumers and other rural carriers. The commission should reject the proposed transaction as currently structured and require specific enforceable measures … to ensure that the merger remains in the public interest,” wrote the Communications Workers of America (CWA), a union that counts thousands of members inside AT&T and Verizon but has struggled to unionize workers in T-Mobile. The Rural Wireless Association also voiced its opposition.
This past May, T-Mobile said it would purchase around 30% of UScellular’s spectrum holdings, all of its 4.5 million customers and its retail stores in a deal worth $4.4 billion. T-Mobile has also said it will make job offers to “a significant number” of UScellular’s employees as part of the transaction. Following T-Mobile’s announcement, both AT&T and Verizon inked deals to acquire roughly $1 billion each worth of UScellular’s spectrum. T-Mobile officials still expect to close the UScellular transaction next year.
“I don’t know how many mergers you’ve heard of in the past that are like, yeah, I can promise you better networks and lower prices right from the get-go, and the company, of course, will benefit from the synergies, and it’s highly accretive. So this is going to be a win all the way around, and I’m confident the government will see it that way as well,” T-Mobile CEO Mike Sievert said this week at an investor event.
However, the U.S. Department of Justice (DoJ) advised a deeper review of T-Mobile’s UScellular proposed acquisition due to T-Mobile’s foreign owner Deutsche Telekom, which indirectly holds 50.42% of T-Mobile’s stock and also holds a proxy agreement that authorizes it to vote additional shares.
Many pundits expect T-Mobile to ultimately close on its purchase of UScellular thanks to the incoming Trump administration, which is expected to be more friendly to acquisitions than the Biden administration has been. As a precedent, Donald Trump’s first administration immediately approved T-Mobile’s $26 billion purchase of Sprint in 2020.
References:
https://www.fcc.gov/ecfs/document/1209299836114/1
https://www.fcc.gov/ecfs/document/120973502037/1
T-Mobile to acquire UScellular’s wireless operations in $4.4 billion deal
T‑Mobile achieves record 5G Uplink speed with 5G NR Dual Connectivity
T-Mobile US claims it broke a world record with its 5G standalone (SA) network via a new feature called New Radio Dual Connectivity (5G DC) [1.]. With 5G DC. The so called “Un-carrier” was able to massively increase uplink throughput and capacity, reaching peak speeds of 2.2 Gbps — that’s the fastest recorded anywhere in the world — and demonstrates the technology’s potential to create serious efficiencies in how data is transmitted from devices to the network.
Note 1. New Radio Dual Connectivity (NR-DC) is a dual connectivity configuration that uses the 5G standalone core (specified by 3GPP but not standardized by ITU-R or ITU-T). In this configuration, both the primary and secondary RAN nodes are 5G gNBs. NR-DC was was specified in 3GPP Release 15 along with simultaneous receive (Rx) / transmit (Tx) band combinations for NR CA/DC.
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To put T-Mo’s 2.2 Gbps uplink speed into context, the latest report from connectivity data specialist Ookla puts the median mobile upload speed in the U.S. at 8.41 Mbps, although that’s across networks. T-Mobile is ahead of major rivals AT&T and Verizon with a median upload speed of 12.19 Mbps.
In June Ookla stated that while U.S. network operators have invested heavily in improving 5G download speeds, “5G upload and latency performance need more attention.” Its data at the time showed Verizon and T-Mobile had comparable 5G upload at just above 15 Mbps, while AT&T lagged somewhat at closer to the 10 Mbps mark.
5G DC enables the Un-carrier to aggregate 2.5 GHz and mmWave spectrum, allowing for an insane boost to uplink throughput and capacity. In this test, T-Mobile was able to allocate 60% of the mmWave radio resources for uplink where previous use cases typically allowed up to 20%. Completed on T-Mobile’s 5G SA production network in SoFi Stadium in Southern California with equipment and 5G DC solution from Ericsson and a mobile test smartphone powered by a flagship Snapdragon® X80 5G Modem-RF System from Qualcomm Technologies, Inc., this test changes the game for providers looking to offer customers and businesses the best experience possible at crowded events.
“With 5G DC, T-Mobile is pushing the boundaries of what’s possible to create better experiences in the places that matter most to our customers,” said Ulf Ewaldsson, President of Technology at T-Mobile. “This accomplishment is a testament to the network we’ve built over the last five years and our ability to deliver unparalleled capabilities that extend beyond the devices in our pockets.”
For those in the know, download speeds typically reign as the top network performance metric, but with recent strides in uplink capabilities and increasingly demanding tasks, upload speed is becoming more important than ever, especially for live events, mobile gaming and extended reality applications.
Because of this, SoFi Stadium served as the perfect test site for 5G DC. Every year, millions of people flock to the stadium for the latest football game or to catch their favorite artists in concert. Naturally, all these people want to post, livestream and share their experiences in real-time, which can sometimes be a challenge at crowded events with limited capacity. Not to mention broadcast crews who need to upload high-definition content to production teams in real-time for those watching at home. With 5G DC and T-Mobile, all of this gets done faster than ever, alleviating posting FOMO and production crew headaches.
Mårten Lerner, Head of Product Area Networks at Ericsson, said: “High uplink speeds are essential for delivering immersive experiences and reliable 5G connectivity. This mirrors one of our key objectives with the recent launch of Ericsson 5G Advanced, which is to elevate user experience by enhancing network performance for more interactive applications. This 5G uplink speed milestone, achieved with T-Mobile and Qualcomm, underscores our commitment to taking user experience to unprecedented levels.”
“We are incredibly proud to achieve yet another world record with T-Mobile. This groundbreaking achievement shows what could be possible with 5G DC and how it can bring new, unparalleled experiences to consumers, especially at large events like football games and concerts,” said Sunil Patil, Vice President, Product Management, Qualcomm Technologies, Inc. “We will continue our close collaboration with global innovators like T-Mobile and Ericsson to push the boundaries and unlock the full potential of 5G.”
5G network covers more than 330 million people across two million square miles. More than 300 million people nationwide are covered by T-Mobile’s super-fast Ultra Capacity 5G with over 2x more square miles of coverage than similar mid-band 5G offerings from the Un-carrier’s closest competitors.
For more information on T-Mobile’s network, visit T-Mobile.com/coverage.
References:
https://www.t-mobile.com/news/network/t-mobile-shatters-for-5g-uplink-speed
https://www.telecoms.com/5g-6g/t-mobile-us-uses-5g-dc-to-claim-uplink-speed-record
Telstra achieves 340 Mbps uplink over 5G SA; Deploys dynamic network slicing from Ericsson
Finland’s Elisa, Ericsson and Qualcomm test uplink carrier aggregation on 5G SA network
Ericsson and MediaTek set new 5G uplink speed record using Uplink Carrier Aggregation
Samsung-Mediatek 5G uplink trial with 3 transmit antennas
Dish Wireless with Qualcomm Technologies and Samsung test simultaneous 5G 2x uplink and 4x downlink carrier aggregation
BT, Nokia and Qualcomm demonstrate 2CC CA on uplink of a 5G SA network
U.S. Cellular to Sell Spectrum Licenses to Verizon in $1 Billion Deal
The WSJ reports that U.S. Cellular is selling a portion of its retained spectrum licenses to Verizon for $1 billion in cash as it looks to monetize the spectrum that wasn’t included in the proposed sale to T-Mobile. The Chicago-based telco, which caters to a base of mostly rural customers (approximately 4.5 million) across several states, on Friday said the deal includes the sale of 663 million megahertz point-of-presences of its cellular spectrum licenses. The deal is expected to close in mid-2025.
Under the terms of the agreement, U.S. Cellular will also sell 11 million megahertz point-of-presences of its advanced wireless services, and 19 million megahertz point-of-presences of its personal communications services licenses. The company said it has entered into additional agreements with two other mobile operators for the sale of other selected spectrum licenses.
TDS, the majority shareholder of U.S. Cellular, has delivered its written consent to approve the Verizon transaction.
Each transaction is dependent upon the closing of the proposed sale of the company’s cellular wireless operations and select spectrum assets to T-Mobile.
In May, T-Mobile agreed to buy much of U.S. Cellular’s operations which included about 30% of UScellular spectrum holdings, all of its customers and its retail stores in a deal worth $4.4 billion. That deal still requires regulatory approvals. It would give T-Mobile more than four million new customers and a trove of valuable spectrum rights to carry more of their data over the air.
According to the financial analysts at New Street Research, UScellular managed to score a higher-than-expected sale price to Verizon. “We valued these licenses at $812 million, and so this transaction is a 23% premium,” they wrote in a note to investors Friday morning.
Importantly, they argued that, as a result, the low band spectrum owned by EchoStar’s Dish Network might be worth more than they had previously calculated. “If we apply the premium to lowband licenses, based on this new mark, Dish’s 600 MHz portfolio would be worth $16 billion, up from $12 billion currently,” they wrote.
The New Street analysts speculated that UScellular’s remaining spectrum holdings will eventually be sold.
“This spectrum transaction took longer than we expected, and it is for fewer of the licenses than we expected,” they wrote of UScellular’s new deal with Verizon. “The monetization of the remaining [UScellular] spectrum could take time, but it will all be sold eventually.”
They argued that UScellular’s remaining, unsold spectrum holdings – which stretch across lowband holdings like 700MHz as well as mid band spectrum like C-band – could be worth as much as $3.2 billion.
But the analysts cautioned that it can be difficult to extrapolate spectrum values from just one transaction alone. For example, the licenses involved in the transaction between Verizon and UScellular are mostly located in smaller markets and therefore may not be directly comparable to spectrum licenses located in bigger cities. Further, most of the spectrum involved in the deal is low band, and so values might be different for large chunks of mid band spectrum.
References:
https://www.lightreading.com/5g/how-verizon-s-1b-uscellular-spectrum-deal-affects-echostar-s-dish
T-Mobile to acquire UScellular’s wireless operations in $4.4 billion deal
UScellular adds NetCloud from Cradlepoint to its 5G private network offerings; Buyout coming soon?
Betacom and UScellular Introduce 1st Private/Public Hybrid 5G Network
UScellular’s Home Internet/FWA now has >100K customers
UScellular Launches 5G Mid-Band Network in parts of 10 states
T-Mobile posts impressive wireless growth stats in 2Q-2024; fiber optic network acquisition binge to complement its FWA business
T-Mobile US today reported a 4% year-over-year YoY) increase in service revenues, to about $16.4 billion, for the recent second quarter. Total sales increased 3%, to almost $19.8 billion. The un-carrier’s profitability metrics were even better. Adjusted earnings (before interest, tax, depreciation and amortization) rose 9%, to nearly $8.1 billion. T-Mobile’s adjusted free cash flow rocketed 54%, to about $4.4 billion. There were also several positive changes to full-year guidance, which included raising the outlook for free cash flow by $150 million (at the midpoint), to $16.8 billion.
“It was another industry-leading quarter for T-Mobile as our continued focus on delivering customers more value and a superior network experience enabled us to outperform our peers in the marketplace and translated into outsized financial growth,” said Mike Sievert, CEO of T-Mobile. “Our formula is continuing to work and we’ve got a lot of room to run including pursuing new growth opportunities that bring the Un-carrier experience to more customers and new markets. This incredible momentum makes us even more excited for what’s next for T-Mobile, and our confidence is reflected in our raised guidance for the full year ahead.”
Peter Osvaldik, T-Mobile’s chief financial officer, boasted “unmatched capital efficiency” on today’s call with analysts. “While our longer-term expectations continue to be in the $9 to $10 billion range annually, as we discussed before, 2024 is a bit lower given certain capital-efficient network activities such as spectrum re-farming and deploying additional 2.5GHz licenses from Auction 108, benefiting from the significant 5G radio deployments during our merger integration,” he said, referring to a previous frequency sale and the $26 billion merger with Sprint in 2020. Site upgrades and build activity is planned in the fourth quarter, he said.
Other T-Mo Highlights:
Industry-Leading Customer Growth Fueled by Best Network and Best Value Combination (1)
- Postpaid net account additions of 301 thousand, best in industry
- Postpaid net customer additions of 1.3 million, best in industry, crossed 100 million postpaid customers milestone
- Postpaid phone net customer additions of 777 thousand, best in industry, highest Q2 in company history, and postpaid phone churn of 0.80%
- High Speed Internet net customer additions of 406 thousand, best in industry, highest share of industry net additions ever
Translating Industry-Leading Customer Growth Into Industry-Leading Financial Performance
- Service revenues of $16.4 billion grew 4% year-over-year, best in industry growth
- Postpaid service revenues of $12.9 billion grew 7% year-over-year, best in industry growth
- Net income of $2.9 billion grew 32% year-over-year, best in industry growth
- Diluted earnings per share (“EPS”) of $2.49 grew 34% year-over-year, best in industry growth
- Core Adjusted EBITDA (2) of $8.0 billion grew 9% year-over-year, best in industry growth
- Net cash provided by operating activities of $5.5 billion, record high and grew 27% year-over-year
- Adjusted Free Cash Flow (2) of $4.4 billion, record high and grew 54% year-over-year
- Returned $3.0 billion to stockholders in Q2 2024, including repurchases of $2.3 billion of common stock and a quarterly dividend payment of $759 million
Overall Network Leader with Largest, Fastest and Most Advanced 5G Network:
T-Mobile’s network breadth, depth and technology leadership is expected to keep the company years ahead of the competition with total 5G and Ultra Capacity 5G coverage area that continues to far exceed that of the next closest competitor. The company’s unique multi-layer approach to 5G, with dedicated standalone 5G deployed nationwide across 600MHz, 1.9GHz, and 2.5GHz, delivers customers a consistently strong experience and 87% of 5G traffic is on sites with all three spectrum bands deployed.
T-Mobile’s 5G leadership has translated into overall network leadership, with the company continuing to earn third-party recognition for its overall network performance:
- Ookla: In its Speedtest Connectivity United States 1H 2024 report, T-Mobile ranked as the top network performer in seven categories, including wins for fastest overall and 5G network and most consistent overall network, along with best overall and 5G mobile video experience, best gaming experience and highest ranking consumer sentiment.
- Opensignal: In its latest USA Mobile Network Experience report, T-Mobile ranked first for all overall network experience metrics while also earning additional wins for 5G with the fastest 5G download speeds, best 5G coverage experience and best 5G availability.
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Notes: See 5G device, coverage, and access details at T-Mobile.com. Ookla awards: Based on analysis by Ookla® of Speedtest Intelligence® data for the U.S., 1H 2024. Ookla trademarks used under license and reprinted with permission. Opensignal Awards: USA: Mobile Network Experience Report July 2024, based on independent analysis of mobile measurements recorded during the period March 1 – May 29, 2024. © 2024 Opensignal Limited. |
- The 5G availability gap between T-Mobile and its competitors measures “what proportion of time people have a network connection, in places they most commonly frequent.” T-Mobile scored 67.9% on average. AT&T managed only 11.8%, while Verizon was on a lousy 7.7%. That gap between one player and the other two on such a seemingly important metric may concern investors in AT&T and Verizon.
- 87% of T-Mo’s 5G traffic is now carried at sites where equipment supports all three of the 600MHz, 1.9GHz and 2.5GHz spectrum bands. AT&T and Verizon, by contrast, rely partly on airwaves in much higher ranges, including frequencies in and around the 3.5GHz band. Often described as a sweet spot for 5G, combining decent propagation with sufficient capacity, this “C-band” has come in for heavy criticism from Moffett. “Put simply, C-band isn’t very good spectrum,” he said in a research note issued earlier this month.
- T-Mo’s CAPEX had decreased and likely will continue to do so. That’s partly why free cash flow is high and rising. Capital expenditure fell from $14 billion in 2022, to $9.8 billion last year, and a dip below the $9 billion mark is now forecast for 2024.
- Net postpaid phone additions were up 777,000 in the second quarter, which resulted in T-Mobile having more than 77.2 million postpaid subs in total. For comparison, AT&T has 88 million postpaid subscribers and 19.3 million prepaid subscribers. Verizon has 94 million wireless retail +30.2 million business postpaid connections for a total of 124.2 million postpaid subs.
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Fiber Optic Network Opportunity:
Historically a pure-play wireless company, T-Mobile is on a fiber binge. In April, it announced intentions to acquire Lumos through a joint venture with investment firm EQT. More recently, it’s teaming with KKR to invest $4.9 billion for a 50% equity stake in Metronet in a joint venture with KKR. When combined, these deals position T-Mobile to reach about 10 million homes with fiber by the end of 2030. That’s on top of the fiber foray it’s doing with open access network operators like Intrepid Fiber, SiFi Networks and Tillman FiberCo.
T-Mo’s fiber appetite is an adjunct to its fixed wireless access (FWA) service. That’s its high-speed internet service that uses extra capacity on its mobile network. T-Mobile ended Q2 with 5.6 million high-speed internet customers. “We sell fixed wireless access in places in the network where we have excess capacity that won’t be consumed either now or in the future by normal mobile usage,” said T-Mobile Marketing President Mike Katz on the earnings call.
“That’s where we sell fixed wireless. In places where we deploy fiber, there’s an opportunity for us take some of the demand that we’re seeing in fixed wireless where those excess capacity pockets don’t exist and move them to fiber, so there’s really a bunch of complementary features to it,” he continued.
“One thing we feel very strongly about is that these (fiber optic network) transactions are not defensive of our mobile business,” CEO Sievert said. “We believe that our mobile business stands strongly alone. Consumer choice has been made very clear that wireless is a deeply considered sale. It’s the primary purchase decision in a connected life and that people will choose the wireless company that is right for them and we believe we will compete effectively as a pure play wireless company regardless of our simultaneous participation in broadband.”
Put together with its 5G broadband service, T-Mobile’s expanding web of physical fiber lines could help the company reach more than 17 million homes by 2030, according to New Street Research. That would trail AT&T and Verizon, which could respectively cover 38 million and 25 million homes with a fixed-line or wireless broadband offering, the research firm says.
“Because they’re in the game, they’re closing the gap with Verizon and AT&T, but they’re well behind,” New Street analyst Jonathan Chaplin said of T-Mobile. “If they really want to build a business the size of AT&T, they’d have to buy a Comcast or a Charter [Communications].”
“It’s kind of a land grab,” said BNP Paribas telecom analyst Sam McHugh, adding that telecom companies are rushing into neighborhoods where residents aren’t happy with their cable provider and don’t yet have fiber-optic service available. “Investors are worried that the more they invest in fiber, the more they become like AT&T and Verizon both in terms of financial profile and business mix,” McHugh said. Any aggressive moves could also drive up the prices of potential deal targets.
“If the whole fiber industry realizes, ‘Hey we have this big monster coming in and buying up fiber,’ it’s probably not the word they want on the street,” said Armand Musey, president of telecom advisory firm Summit Ridge Group. “Suddenly, all the sellers would have their antennas up.”
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References:
https://www.lightreading.com/5g/t-mobile-results-pile-5g-humiliation-onto-at-t-and-verizon
https://www.verizon.com/about/sites/default/files/Verizon_Fact_Sheet.pdf
https://www.t-mobile.com/news/network/t-mobile-kkr-joint-venture-to-acquire-metronet
https://www.wsj.com/business/telecom/t-mobile-fiber-optic-internet-connection-380957ef
T-Mobile to acquire UScellular’s wireless operations in $4.4 billion deal
T-Mobile & EQT Joint Venture (JV) to acquire Lumos and build out T-Mobile Fiber footprint
T-Mobile US, Ericsson, and Qualcomm test 5G carrier aggregation with 6 component carriers
Ookla: T-Mobile and Verizon lead in U.S. 5G FWA
T-Mobile combines Millimeter Wave spectrum with its 5G Standalone (SA) core network
5G Advanced offers opportunities for new revenue streams; 3GPP specs for 5G FWA?
A Mobile World Live webinar on 5G-advanced upgrades identified new opportunities for network operator revenue streams, mostly due to improved network efficiencies and reduced costs. 5G Advanced, the next step in 5G evolution, will be specified in 3GPP Release 18 and 19. There is no work on it in ITU-R which is now focused on IMT-2030 (6G).
Egil Gronstad, T-Mobile senior director-technology development and strategy, said 5G Advanced will present opportunities for new revenue streams: 5G IoT will have lower cost and lower power consumption of endpoint devices (Redcap). Another 5G Advanced capability will be Ambient IoT (coming in Rel 19) which has a lot of opportunities via lower cost and no battery required in IoT devices. A bit further out is Integrated sensing and communications -using the network as a radar system to detect objects of interest. Improved spectrum efficiency will be improved using AI/ML for beam management.
Egil said 3GPP should develop specs for fixed wireless access (FWA). He’s disappointed with 3GPP not pursuing 5G FWA. “We haven’t really done anything in the 3GPP specs to specifically address fixed wireless,” he said. Neither has ITU-R WP 5D, which is responsible for developing all ITU-R recommendations for IMT (3G, 4G, 5G, 6G). FWA was not identified as an ITU use case for 5G and that hasn’t changed with 5G Advanced.
References:
https://www.nokia.com/about-us/newsroom/articles/5g-advanced-explained/
What is 5G Advanced and is it ready for deployment any time soon?
Huawei pushes 5.5G (aka 5G Advanced) but there are no completed 3GPP specs or ITU-R standards!
China Mobile & ZTE use digital twin technology with 5G-Advanced on high-speed railway in China
ZTE and China Telecom unveil 5G-Advanced solution for B2B and B2C services
ABI Research: 5G-Advanced (not yet defined by ITU-R) will include AI/ML and network energy savings
FWA a bright spot in otherwise gloomy Internet access market
Parks Associates’ newly launched Broadband Market Tracker, states that U.S. Fixed Wireless Access (FWA) adoption from a mobile network operator hit 7.8 million U.S. residential home internet connections in Q1-2024. That’s in comparison to 106.3 million U.S. households that had home internet service at the end of 2023.
Kristen Hanich, director of research at Parks Associates, told Fierce Network FWA and satellite internet are the “fastest growing” segments of the broadband market, “attracting consumers who were previously unserved or underserved by traditional providers.” She noted for the past several years, the FWA base has grown by 700,000 to 900,000 subscribers per quarter while cable connections have declined.
T-Mobile in Q1-2024 passed the 5 million mark for FWA subscribers and Verizon reported a total FWA tally of 3.4 million subscribers. These figures include both residential and business FWA customers.
Key FWA Findings from OpenSignal:
- 5G FWA has reshaped the U.S. broadband market. It has allowed U.S. mobile operators to rapidly expand their broadband footprints for minimal incremental network investment. This has seen 5G FWA absorb all broadband subscriber growth in the market since mid-2022.
- FWA is the secret sauce for 5G monetization. FWA benefits from lower prices compared to wireline competition, access to existing mobile retail channels and subscribers, and the ability to deliver a “good enough” broadband service.
- U.S. mobile networks have proven to be resilient. Despite adding millions of 5G FWA subs since 2021, 5G speeds on T-Mobile and Verizon’s mobile networks have continued to improve. Their success in managing FWA traffic is due to a variety of factors, including plentiful access to mid-band spectrum, localized load management, and differences in peak usage time of day patterns between mobile and FBB usage.
- Elsewhere, there are mixed results. In India, Jio is seeing no discernible impact from FWA on the mobile experience of its users, while in Saudi Arabia Zain is seeing the additional load on its network from FWA having a greater influence on mobile users’ experience, depending on the time of day or the level of FWA penetration.
“Despite adding more than eight million 5G FWA subs using 400+ GB per month of data since Q1 2021, the overall mobile network experience on T-Mobile and Verizon’s mobile networks has not been compromised,” Opensignal analyst Robert Wyrzykowski wrote in the firm’s new assessment of FWA technology.
In its new report, Opensignal found that areas in the U.S. with a larger number of FWA customers actually showed better networking performance than areas with fewer FWA customers. Meaning, Verizon and T-Mobile offered increasingly speedy connections even in geographic locations with higher concentrations of FWA users.
“We would expect low-FWA penetration areas to see better mobile and FWA performance because of less load on the network. However, our data demonstrates the opposite trend,” Wyrzykowski explained.
Other Opensignal findings:
- Around 6% of urban Internet customers subscribe to FWA; in rural areas that figure is 7%.
- Some 74% of FWA customers pay less than $75 per month for their services.
- 35% of FWA customers are between 18-34 years old, whereas that age range is 25% for cable.
Opensignal’s findings provide an important view into the FWA industry in the US as its subscriber growth begins to slow. For example, T-Mobile added 405,000 FWA customers during the first quarter, far less than the 541,000 FWA customers it added during the fourth quarter of 2023.
“5G FWA services have been on a dramatic growth trajectory in the U.S., absorbing all broadband subscriber growth in the market since mid-2022 and amassing more than 600-700 thousand net adds per quarter,” wrote Opensignal’s Wyrzykowski. “This is despite the USA being a mature broadband market with nearly 97% broadband adoption and modest household growth.”
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U.S. cable companies have recorded historic declines in their core Internet businesses amid the growth of FWA in the U.S. Financial analysts at TD Cowen predict the U.S. cable industry will collectively lose more than half a million customers in the second quarter of this year. They attribute that decline to FWA competition as well as other factors including the end of the U.S. government’s Affordable Connectivity Program (ACP).
The situation for cable might get even worse if FWA providers like T-Mobile and Verizon decide to invest further into their fixed wireless businesses.
“The pain for cable may continue for longer than expected as the ability for cable to return to broadband subscriber growth may take longer (if ever),” wrote the TD Cowen analysts in a recent note to investors.
Others agree. For example, the analysts at S&P Global wrote that cable service providers in general have been losing value to wireless network operators despite cable’s efforts to bundle mobile services into cable offerings.
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Parks’ Hanich said fiber optic access technology is on an upswing and Parks is seeing “excellent growth in the markets where it is available and high customer satisfaction with the customers who have it.”
“But the numbers are not quite as dramatic as what’s been going on with T-Mobile, Verizon and Starlink,” she said, noting the “growing convergence” of satellite and mobile networks is something else to keep an eye on.
Asked whether the demise of the Affordable Connectivity Program has had any impact on Parks’ findings, Hanich said, “we are concerned that the end of the program will result in households and families needing to disconnect from the internet for financial reasons.”
“For a good percentage of Americans, household budgets have been hit by rising inflation and lower-income families especially are having to cut back,” she said. “Thankfully we are seeing ISPs step up, try and transition people onto other plans and initiatives.”
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Separately, Parks found adoption of mobile virtual network operator (MVNO) services reached over 15 million residential customer mobile lines in the quarter. In an MVNO model, broadband operators lease spectrum capacity from a wireless network to stand up their own mobile offering.
NTIA published some findings from its latest Internet Use Survey. Unsurprisingly, internet usage in the U.S. has gone up, with 13 million more people using the internet in 2023 compared to 2021. However, a lot of that usage is coming from lower-income households. Specifically, internet adoption among households making less than $25,000 per year increased from 69% in 2021 to 73% in 2023.
References:
https://www.fierce-network.com/broadband/fixed-wireless-continues-its-climb-among-us-homes-parks
https://www.lightreading.com/fixed-wireless-access/fwa-in-the-usa-getting-ready-for-phase-2
Fiber and Fixed Wireless Access are the fastest growing fixed broadband technologies in the OECD
Summary of Verizon Consumer, FWA & Business Segment 1Q-2024 results
Verizon’s 2023 broadband net additions led by FWA at 375K
AT&T’s fiber business grows along with FWA “Internet Air” in Q4-2023
Ericsson: Over 300 million Fixed Wireless Access (FWA) connections by 2028
T-Mobile to acquire UScellular’s wireless operations in $4.4 billion deal
T-Mobile will buy almost all of regional carrier UScellular’s wireless operations including customers, stores and 30% of its spectrum assets [1.] in a deal valued at $4.4 billion, the company said on Tuesday. The announcement comes nearly ten months after UScellular and its parent company TDS disclosed that they were undertaking a strategic review of the mobile business, suggesting a possible sale.
Note 1. UScellular stated that it will retain around 70% of its spectrum assets following the T-Mobile deal “and will seek to opportunistically monetize these retained assets.”
The transaction, which is subject to the satisfaction of customary closing conditions and receipt of certain regulatory approvals, is expected to close in mid-2025.
T-Mobile’s 5G SA network will expand to provide millions of UScellular customers, particularly those in underserved rural areas, a superior connectivity experience, moving from a roaming experience outside of the UScellular coverage area to full nationwide access on the country’s largest and fastest 5G network. Additionally, UScellular customers will have the ability to fully participate in the T-Mobile’s industry-leading value-packed plans filled with benefits and perks, and best-in-class customer support with the opportunity to save UScellular customers hundreds of millions of dollars. T-Mobile customers will also get access to UScellular’s network in areas that previously had limited coverage and the benefit of enhanced performance throughout UScellular’s footprint from the addition of the acquired UScellular spectrum to T-Mobile’s network.
“With this deal T-Mobile can extend the superior Un-carrier value and experiences that we’re famous for to millions of UScellular customers and deliver them lower-priced, value-packed plans and better connectivity on our best-in-class nationwide 5G network,” said Mike Sievert, CEO of T-Mobile. “As customers from both companies will get more coverage and more capacity from our combined footprint, our competitors will be forced to keep up – and even more consumers will benefit. The Un-carrier is all about shaking up wireless for the good of consumers and this deal is another way for us to continue doing even more of that.”
“T-Mobile’s purchase and integration of UScellular’s wireless operations will provide best-in-class connectivity to rural Americans through enhanced nationwide coverage and service offerings at more compelling price points,” said Laurent Therivel, CEO of UScellular. “The transaction provides our customers access to better coverage and speeds, as well as unlimited texting in more than 215 countries, content offers, device upgrades and other T-Mobile benefits.”
Best-in-Class Network Experience
The combination of both companies’ spectrum and assets will provide UScellular customers a superior connected experience on T-Mobile’s industry-leading nationwide 5G network that offers best-in-class performance, coverage, and speed. Customers of both companies, particularly those in underserved rural areas, will receive access to faster and more reliable 5G service they would not otherwise have.
Value-Packed Plans
UScellular customers will have the option to stay on their current plans or move to an unlimited T-Mobile plan of their choosing with no switching costs, which include beloved Un-carrier benefits such as streaming and free international data roaming. If UScellular customers choose to switch to T-Mobile, they could save hundreds of millions of dollars combined annually. Some will also have access to plans with increased savings previously not available to them, including T-Mobile’s 5G Unlimited 55+ plans. All customers will be able to take advantage of T-Mobile’s award-winning customer service team, and have better, more accessible in-person and digital retail support.
More Choice and Increased Competition
This transaction will create a much-needed choice for wireless in areas with expensive and limited plans from AT&T and Verizon, and for those that have been limited to one or no options for home broadband connectivity. By tapping into the additional capacity and coverage created through the combined spectrum and wireless assets, T-Mobile will spur competition and expand its fast-growing home broadband offering and fixed wireless products to communities without competitive broadband options, further bridging the digital divide for hundreds of thousands of customers in UScellular’s footprint.
Proven Un-carrier Playbook
T-Mobile has a proven industry-leading track record of bringing companies together in the name of enhanced connectivity, choice, and value for consumers. The integrations of MetroPCS in 2013 and Sprint in 2020 have been noted as two of the most successful merger combinations in wireless history that resulted in competition-enhancing shifts benefiting millions of consumers. Leveraging its tried-and-true playbook for successful integrations, T-Mobile will continue to deliver exceptional value and experiences to more people across the country, while forcing others to follow suit, for the good of customers.
Transaction Details and Financial Profile
T-Mobile will pay approximately $4.4 billion for the assets being acquired from UScellular in the transaction in a combination of cash and up to $2.0 billion of debt to be assumed by T-Mobile through an exchange offer to be made to certain UScellular debtholders prior to closing. To the extent any debtholders do not participate in the exchange, their bonds will continue as obligations of UScellular and the cash portion of the purchase price will be correspondingly increased. Following the closing of the transaction, UScellular will retain ownership of its other spectrum as well as its towers, with T-Mobile entering into a long-term arrangement to lease space on at least 2,100 additional towers being retained.
T-Mobile does not expect the transaction to impact the company’s 2024 guidance or 2024 authorized shareholder return program. T-Mobile expects this transaction will yield approximately $1.0 billion in effective total opex and capex annual run rate cost synergies upon integration, with total cost to achieve the integration currently estimated at between $2.2 billion to $2.6 billion. The company plans to reinvest a portion of synergies toward enhancing consumer choice, quality and competition in the wireless industry.
References:
https://www.t-mobile.com/news/business/uscellular-acquisition-operations-assets
https://finance.yahoo.com/news/t-mobile-buy-uscellulars-wireless-114507766.html
UScellular adds NetCloud from Cradlepoint to its 5G private network offerings; Buyout coming soon?
Betacom and UScellular Introduce 1st Private/Public Hybrid 5G Network
UScellular’s Home Internet/FWA now has >100K customers
UScellular Launches 5G Mid-Band Network in parts of 10 states
UScellular adds NetCloud from Cradlepoint to its 5G private network offerings; Buyout coming soon?
UScellular has added NetCloud Private Networks from Cradlepoint (part of Ericsson) to expand its portfolio of private cellular solutions. The company now offers Ericsson Private 5G and Ericsson’s Mission Critical Networks to its customers. By building on these capabilities, UScellular is able to support even more customers across varying areas of business.
Some existing private cellular network ecosystems are pulled together piece by piece from different providers, which requires additional training and agreements. This makes it difficult for enterprise IT teams to have seamless visibility across the entire network. NetCloud Private Networks is an end-to-end private cellular network solution that removes these complexities to simplify building and operating 5G private networks.
“With the addition of NetCloud Private Networks to our portfolio, we can better address business challenges for customers of all sizes to connect business, industry and mission critical applications,” said Kim Kerr, senior vice president, enterprise sales and operations for UScellular. “The agility, flexibility and scalability of NetCloud Private Networks helps improve coverage, security, mobility, and reliability for applications where Wi-Fi may not be enough.”
NetCloud Private Networks supports enterprises who need more scalable, reliable and secure connectivity than they are getting today with traditional Wi-Fi solutions. There is significant opportunity in warehouses, logistics facilities, outdoor storage yards, manufacturing and retail operations environments to provide more connectivity. This will alleviate manual work, improve safety, and provide increased visibility.
“UScellular is a leader in this space by showing how a public carrier enhances the value of private network solutions,” said Manish Tiwari, head of private cellular networks, Cradlepoint and Ericsson Enterprise Wireless Networks.
“By adding NetCloud Private Networks to their portfolio of Ericsson private networks solutions, UScellular unlocks new opportunities for organizations to have local network coverage and address their reliability and security challenges. With solutions available to cater to both OT and IT in industrial and business environments, their customers have a choice in adopting the right private network solution for their use-cases with secure, policy-based wireless connectivity at scale.”
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Separately, The Wall Street Journal reported Thursday that T-Mobile is seeking to buy $2 billion worth of UScellular and take over some operations and wireless spectrum licenses. A deal could be announced this month, according to people familiar with the matter.
Meanwhile, Verizon is considering a deal for some of the rest of the company which is 80% owned by Telephone & Data Systems (TDS). Last year, TDS put the wireless company’s operations up for sale, as it struggled with competition from national wireless telco rivals and cable-broadband providers.
Verizon is the biggest U.S. cellphone carrier by subscribers, while T-Mobile became the second largest soon after it bought rival Sprint. T-Mobile gained more customers this month after it completed its purchase of Mint Mobile, an upstart brand.
The rising value of wireless licenses is a driving force behind the deal. U.S. Cellular’s spectrum portfolio touches 30 states and covers about 51 million people, according to regulatory filings.
U.S. companies have spent more than $100 billion in recent years to secure airwaves to carry high-speed fifth-generation, or 5G, signals and are hunting for more. But the Federal Communications Commission has lacked the legal authority to auction new spectrum for more than a year. The drought has driven up the price of spectrum licenses at companies that already hold them.
The U.S. wireless business has also matured: Carriers have sold a smartphone subscription to most adults and many children, which leaves less room for expansion as the country’s population growth slows. AT&T and Verizon have meanwhile retreated from expensive bets on the media business to focus on their core cellphone and home-internet customers.
A once-crowded field of small, midsize and nationwide cellphone carriers in the U.S. is now split among Verizon, T-Mobile and AT&T, leaving few players left to take over. As one of the last pieces left on the board, U.S. Cellular has long been an attractive takeover target. For many years, the home of the Chicago White Sox has been UScellular field.
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About UScellular:
UScellular offers wireless service to more than four million mostly rural customers across 21 states from Oregon to North Carolina. It also owns more than 4,000 cellular towers that weren’t part of the latest sale talks. The company has a market value of about $3 billion.
UScellular provides a range of solutions from public/private hybrid networks, MVNO models, localized data (aka CUPS) and custom VPN approaches. Private 5G offers unparalleled reliability, security and speed, enabling seamless communication and automation. For more information:
https://business.uscellular.com/products/private-cellular-networks/
References:
https://www.wsj.com/business/telecom/t-mobile-verizon-in-talks-to-carve-up-u-s-cellular-46d1e5e6
Betacom and UScellular Introduce 1st Private/Public Hybrid 5G Network
T-Mobile & EQT Joint Venture (JV) to acquire Lumos and build out T-Mobile Fiber footprint
T-Mobile and EQT, a purpose-driven global investment organization, today announced they have entered into a joint venture (JV) with EQT’s Infrastructure VI fund (EQT) that will acquire fiber-to-the-home platform Lumos from EQT’s predecessor fund EQT Infrastructure III.
The JV will bring T-Mobile’s retail, marketing, brand and customer experience strengths together with EQT’s fiber infrastructure investment expertise. Together they will acquire Lumos’ scalable fiber network build capabilities to deliver best-in-class high-speed fiber internet connectivity to customers across the U.S. without access to fiber today. After the transaction closes, Lumos, which currently reaches 320,000 households over 7,500 route miles with fiber optic internet and home wi-fi service in the Mid-Atlantic, will transition to a wholesale model with T-Mobile as the anchor tenant owning customer relationships and leveraging its brand to attract new subscribers. The JV will focus on market identification and selection, network engineering and design, network deployment, and customer installation.
“As the demand for reliable, low-latency connectivity rapidly increases, this deal is a scalable strategy for T-Mobile to take a significant step forward in expanding on our broadband success and continue shaking up competition in this space to bring even more value and choice to consumers,” said Mike Sievert, CEO of T-Mobile. “Together with EQT and Lumos, T-Mobile is building on our position as the fastest growing broadband provider in the country in a value-accretive way that complements our sustained growth leadership in wireless. Customers – homes and businesses – who get the fast, affordable, and reliable internet they need will be the real winners,” he added.
T-Mobile provides a unique value proposition and much-needed reliable connectivity to homes and businesses across the country through its 5G Internet, a fixed wireless internet service on its 5G network that is available to more than 50 million households and businesses nationwide and serves over 5 million customers, as well as T-Mobile Fiber, which has launched in parts of 16 U.S. markets. Those launches have shown consumer demand for broadband that T-Mobile cannot meet through its fallow capacity fixed wireless product alone, and many customers want the speed and reliability that only fiber can provide.
Jan Vesely, Partner within EQT’s Infrastructure Advisory Team said, “We are proud to have partnered with Lumos over the past six years to rapidly scale the company and roll out fiber to underserved markets, and we look forward to continuing to leverage EQT’s considerable digital infrastructure and fiber expertise to support the significant fiber buildout ambitions of T-Mobile and the JV. This new effort will build critical fiber broadband infrastructure that will enable remote work, education, and healthcare use cases across the country. We have worked with T-Mobile as a customer across many of our existing digital infrastructure investments and are delighted to build on that relationship and partner with T-Mobile on this opportunity to roll out fiber to underserved Americans.”
“Lumos takes great pride in our achievements, as we have successfully delivered fiber to hundreds of thousands of homes and businesses, marking a significant acceleration in our growth. Our commitment to enhancing customers’ lives through the development of a network prepared for the demands of tomorrow remains steadfast,” Brian Stading, CEO of Lumos. “With the support of our private equity partner, EQT, and leveraging the strength of the T-Mobile brand and unrivaled customer experience, Lumos is set to expedite our network expansion. This joint venture will amplify our ability to change lives through the transformative power of fiber optic internet.”
The transaction is expected to close in late 2024 or early 2025, subject to customary closing conditions and regulatory approvals. At closing, T-Mobile is expected to invest approximately $950 million in the JV to acquire a 50% equity stake and all existing fiber customers, with the funds invested by T-Mobile being used by Lumos for future fiber builds. The next capital contribution by T-Mobile out of an additional commitment of approximately $500 million is anticipated between 2027 and 2028. These combined investments are expected to allow Lumos to reach 3.5 million homes passed by the end of 2028. T-Mobile continues to expect to complete its remaining authorization for share repurchases and dividends in 2024.
With this transaction, EQT Infrastructure VI is expected to be 35-40% percent invested (including closed and/or signed investments, announced public offers, if applicable, and less any expected syndication) based on target fund size and subject to customary regulatory approvals.
References:
https://www.t-mobile.com/news/business/t-mobile-eqt-jv-to-acquire-lumos
T-Mobile US, Ericsson, and Qualcomm test 5G carrier aggregation with 6 component carriers
Ookla: T-Mobile and Verizon lead in U.S. 5G FWA
T-Mobile combines Millimeter Wave spectrum with its 5G Standalone (SA) core network
T-Mobile US, Ericsson, and Qualcomm test 5G carrier aggregation with 6 component carriers
T-Mobile US, in a partnership with Ericsson and Qualcomm Technologies, has successfully tested the aggregation of six component carriers in sub-6 GHz spectrum in its live production 5G network.
The test involved aggregating two channels of 2.5 GHz, two channels of PCS spectrum and two channels of AWS spectrum, according to T-Mobile US, which produced an “effective 245 MHz of aggregated 5G channels.”
T-Mo said that they were able to “achieve download speeds of 3.6 Gbps in sub-6 GHz spectrum. That’s fast enough to download a two-hour HD movie in less than 7 seconds!”
5G carrier aggregation allows T-Mobile to combine multiple 5G channels (or carriers) to deliver greater speed and performance. In this test, the Un-carrier merged six 5G channels of mid-band spectrum – two channels of 2.5 GHz Ultra Capacity 5G, two channels of PCS spectrum and two channels of AWS spectrum – creating an effective 245 MHz of aggregated 5G channels.
Image Courtesy of Qualcomm Technologies
“We are pushing the boundaries of wireless technology to offer our customers the best experience possible,” said Ulf Ewaldsson, President of Technology at T-Mobile. “With the first and largest 5G standalone network in the country, T-Mobile is the only mobile provider serving 10s of millions of customers to unleash new capabilities like 5G carrier aggregation nationwide, and I am so incredibly proud of our team for leading the way.”
T-Mobile US announced in May of 2023 that it was rolling out four component-carrier aggregation across its 5G Standalone network, which it said at the time can achieve peak speeds of 3.3 Gbps. In that case, T-Mobile US relies on two 2.5 GHz channels, one 1.9 GHz channel and one 600 MHz channel. The first device able to access 4CA capabilities was the Samsung Galaxy S23.
The carrier also touted its testing of five-component-carrier aggregation in sub-6 GHz spectrum at last year’s Mobile World Congress Barcelona. In that trial, working with Nokia and Qualcomm, T-Mo aggregated two FDD and three TDD carriers and achieved peak downlink throughput speeds that exceeded 4.2 Gbps.
T-Mobile claims to be the leader in 5G, delivering the country’s largest, fastest and most awarded 5G network. The Un-carrier’s 5G network covers more than 330 million people across two million square miles — more coverage area than AT&T and Verizon combined. 300 million people nationwide are covered by T-Mobile’s super-fast Ultra Capacity 5G with over 2x more square miles of coverage than similar offerings from the Un-carrier’s closest competitors.
References:
https://www.ericsson.com/en/ran/carrier-aggregation