The New T-Mobile (with Sprint): Merging incompatible 3G networks and integrated 5G

At long last, T-Mobile closed its $23 billion acquisition of Sprint today (April 1, 2020) after a two-year effort to merge the two companies. The New T-Mobile also replaced long-time uncarrier CEO (cowboy) John Legere with his hand-picked successor Mike Sievert. T-Mobile now takes its place as an equal among the three major wireless carriers in the US.

The deal was the subject of protracted legal actions, opposition by 11 state attorney generals, lobbying before the FCC and the Justice Department, and other actions as consumer groups tried to find a way to block it.

The merger required Sprint to divest itself of Boost Mobile and the remains of Virgin Mobile, and it required a number of commitments by T-Mobile not to raise prices for three years, and to provide widespread wireless broadband. T-Mobile also had to help Dish Networks become a competitive wireless company as a way to quell fears that the merger would leave the U.S. with only three wireless telcos instead of four.

“During this extraordinary time, it has become abundantly clear how vital a strong and reliable network is to the world we live in. The New T-Mobile’s commitment to delivering a transformative broad and deep nationwide 5G network is more important and more needed than ever and what we are building is mission-critical for consumers,” said Mike Sievert, president and CEO of T-Mobile. “With this powerful network, the New T-Mobile will deliver real choice and value to wireless and home broadband customers and double down on all the things customers have always loved about the Un-carrier. T-Mobile has been changing wireless for good — and now we are going to do it on a whole new level!”

Sievert continued, “All of us at T-Mobile owe John an incredible thank you for everything he’s done to get this company to where we are today. He has changed what it means to be a CEO. Everything that T-Mobile has accomplished is the result of his vision for what a different kind of wireless provider could be. John IS what the Un-carrier is all about: advocating for customers at every turn, forcing us to think differently and always driving for more. He has always pushed the boundaries of what’s possible and pushed us to do the same. His leadership has made us what we are today, and we will take that into the future. Thank you, John, for everything you’ve done for wireless consumers and for our beloved employees!

I also want to thank Marcelo Claure and the entire Sprint leadership team for their hard work to get us to this huge day! We did it!… and I’m looking forward to welcoming Sprint employees into Team Magenta, and to working with you now as a member of our Board of Directors.”

This quantum leap forward can only be achieved by using T-Mobile and Sprint’s combined low-, mid- and high-spectrum bands — and only the New T-Mobile will have the resources to do it quickly.

  • The network will have 14 times more capacity in the next six years than T-Mobile alone has today, enabling the New T-Mobile to leapfrog the competition in network capability and experience.
  • Customers will have access to average 5G speeds up to eight times faster than current LTE in just a few years and 15 times faster over the next six years.
  • Within six years, the New T-Mobile will provide 5G to 99% of the U.S. population and average 5G speeds in excess of 100 Mbps to 90% of the U.S. population.
  • New T-Mobile’s business plan is built on covering 90% of rural Americans with average 5G speeds of 50 Mbps, up to two times faster than broadband on average.

“The network is at the core of everything we do as a business, and it’s critically important for keeping customers connected to each other, their communities and the world,” said Neville Ray, president of Technology at T-Mobile. “The supercharged 5G network that we’ll build as a combined company will be a huge step forward, transforming wireless, fueling innovation and delivering new experiences for customers all across the country that we can’t even imagine today.”

Impact on Users:

For users, the merger will initially be a non-event.  Sprint is now a subsidiary of T-Mobile and will operate as a separate company. The transition will occur in stages, and while T-Mobile isn’t commenting on that, a highly placed source at T-Mobile said on background that customers of both companies will find that they have access to the other’s network in areas where they need better coverage.

However, many Sprint 3G devices (CDMA) can work on the T-Mobile’s 3G network (GSM), especially for voice calls or if 4G LTE mobile data access is not available.  T-Mobile plans to use the model it used when it acquired MetroPCS, which was also an incompatible network. In that merger, T-Mobile replaced incompatible handsets as the old network was decommissioned.

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Pundits Weigh In:

Keith Pennachio, EVP and chief strategy officer at SQUAN, a network infrastructure company serving both T-Mobile and Sprint, said that he expects to see growth in network infrastructure. “We’ll see network consolidation, networks convergence for some sites and for moving traffic,” he said.

“I expect T-Mobile to take advantage of spectrum assets where T-Mobile didn’t have assets previously,” Pennachio said. “What you’ll start to see in markets where Sprint had a decent footprint, T-Mobile may opt to supplant some equipment to their own.” This will mean that in areas where T-Mobile didn’t have a great signal, the company will use Sprint’s sites and frequencies to improve things.

As the merger progresses, T-Mobile will update the programming on some cell sites so that Sprint customers with compatible phones will be able to use them. T-Mobile will also begin using Sprint’s 2.5 GHz mid-band spectrum to build out its network.

“I think they’re going to be very busy integrating the business, the networks and the employees,” said Brandon Parris of Morrison & Foerster, “and start in earnest their upgrades and their focus on 5G.” Parris led the team that advised Sprint and and its owner Softbank on the merger with T-Mobile.

“Whenever you have two huge industry giants it takes time,” Parris explained, “but they will go through the process of making sure the technology is integrated, and then adding 5G. You have to integrate everything from office space to compensation arrangements. It’s huge undertaking.”

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Deploying 5G:

According to a FAQ press release, “the new TMobile will build a transformative nationwide 5G network that will drive innovation and connect every American. With TMobile’s low-band, Sprint’s mid-band, and other spectrum, the highest capacity nationwide network in U.S. history will be built—400MHz+ on average nationwide.”

T-Mobile is starting its 5G buildout “almost immediately”
T-Mobile has long said that the primary driver for its merger with Sprint is its desire to combine its 600MHz spectrum with Sprint’s 2.5GHz spectrum for a 5G network. Indeed, in its press release Wednesday the New T-Mobile promised its forthcoming network would have 14 times more capacity in the next six years than T-Mobile alone has today. The operator added that it expects to provide average 5G speeds above 100Mbit/s to 90% of the US population within the next six years.

In comments to CNBC, incoming CEO Sievert said the operator is going to start on the construction of the network “almost immediately.” He said the company would use equipment from its existing suppliers Nokia and Ericsson to build “the world’s best 5G network.”

A key factor in in the integration of the two networks, will be the speed at which T-Mobile can begin rolling out its use of Sprint’s mid-band spectrum, which is critical to its 5G success.

While T-Mobile already has nationwide 5G with its 600 MHz low-band frequencies that feature much longer range than can exist in higher bands, the low bands have lower speeds. Mid-band spectrum is considered a perfect compromise between the speeds in the millimeter wave bands and the lower speeds in the low bands.

“With its lead in customer care and cost of service, T-Mobile is well positioned to bring that winning culture to its new family members, both the employees of Sprint as well as its customers,” said Ian Greenblatt, TMT head at J. D. Power. “The only 5G nationwide network is notable (despite being 600MHz only – it’s still faster than the fastest 4G-LTE) and will be even more capable with the addition of Sprint’s mid-band spectra.”

CTO Neville Ray told CNET that the operator would turn on its new 5G network first in Philadelphia, and that other cities would go live “rapidly” in the coming weeks.

Conclusions:

According to Pennachio, T-Mobile’s culture will play a critical role in the success of the merged companies. “The culture of T-Mobile is very different,” he said. “Now it creates this third competitor that’s strong from a spectrum but with a culture that’s more in line with technology companies.”

T-Mobile’s “in your face” culture, which has been compared with that at many Silicon Valley startups, could play a significant role in how the company impacts the wireless business.

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References:

https://www.t-mobile.com/news/t-mobile-sprint-one-company

https://www.forbes.com/sites/waynerash/2020/04/01/t-mobile-joins-the-ranks-of-major-carriers-as-sprint-acquisition-closes/#14157faf5528

https://www.t-mobile.com/support/account/t-mobile-sprint-merger-faqs

https://www.lightreading.com/5g/the-eight-new-things-we-learned-about-new-t-mobile/d/d-id/758625?

 

U.S. District Judge approves T-Mobile- Sprint merger; New T-Mo will be #2 wireless carrier in U.S.

A federal judge has ruled in favor of T-Mobile USA’s merger with Sprint, despite evidence presented that showed the deal will likely erode competition, raise U.S. wireless data prices, and result in significant layoffs as redundant jobs are eliminated.  U.S. District Judge Victor Marrero concluded the T-Mobile USA merger with Sprint, worth $26 billion when it was struck two years ago, wasn’t likely to substantially lessen competition, and rejected the main arguments by a group of states seeking to block the deal as anti-competitive.  The judge praised T-Mobile in his ruling, calling it “a maverick that has spurred the two largest players in its industry to make numerous pro-consumer changes” and describing its business strategy as “undeniably successful.

Judge Marrero wrote:

“While Sprint has made valiant attempts to stay competitive in a rapidly developing and capital-intensive market, the overwhelming view both within Sprint and in the wider industry is that Sprint is falling farther and farther short of the targets it must hit to remain relevant as a significant competitor.”

“Finally, the FCC and DOJ have closely scrutinized this transaction and expended considerable energy and resources to arrange the entry of Dish as a fourth nationwide competitor, based on its successful history in other consumer industries and its vast holdings of spectrum, the most critical resource needed to compete in the RMWTS markets.”

“Dish’s statements at trial persuade the court that the new firm will take advantage of this opportunity, aggressively competing in the RMWTS markets to the benefit of price-conscious consumers and opening for consumer use a broad range of spectrum that had heretofore remained fallow.”

The two companies said they would move forward to finalize their long-delayed merger. The deal’s current terms offer Sprint shareholders new stock equal to 0.10256 of one T-Mobile share.

“Today was a huge victory for this merger… and now we are FINALLY able to focus on the last steps to get this merger done!” cheered T-Mobile CEO John Legere (pictured below) in a press release.

The states might decide to appeal the ruling and another U.S. district judge in Washington must approve the existing Justice Department arrangement. Letitia James, New York’s attorney general, said the states disagreed with the decision and would review their options. “There is no doubt that reducing the mobile market from four to three will be bad for consumers, bad for workers and bad for innovation,” Ms. James said.

The two companies also need clearance from California’s Public Utilities Commission and face a private antitrust suit challenging the merger. A judge in the Northern District of California ruled in January 2020 that the case could proceed if the carriers overcame the state-led challenge.

T-Mobile and Sprint hope to close the merger by April 1st. The two telcos have spent more than seven years pursuing a combination in some form. They abandoned previous attempts in 2013 and 2017 before their boards struck an agreement in early 2018 that would allow T-Mobile to take over its smaller rival, creating a company closer in size to Verizon and AT&T.

The new T-Mobile would be a formidable rival to Verizon and AT&T, the two largest wireless carriers in the country.  In fact, the total number of “New T-Mobile” wireless subscribers will be more than AT&T currently has.

The “New T-Mobile” will be strengthened by a massive stockpile of wireless radio licenses held by Sprint. Those spectrum holdings allow the new company to serve more customers with high-speed internet service on the go, putting pressure on AT&T and Verizon to match them as carriers upgrade to faster 5G mobile networks.

The court victory also benefits T-Mobile parent Deutsche Telekom AG and Japan’s SoftBank Group Corp., Sprint’s majority owner. SoftBank Chairman Masayoshi Son, a billionaire investor who upended the telecom business in Japan, had been seeking a way to rescue an investment that proved less successful in the U.S.

Tuesday’s court verdict will test the idea that three big players will compete as effectively as four did. Dish enters the market with fewer customers than Sprint, making it a distant No. 4 in the consumer-cellular business.

Dish Chairman Charlie Ergen testified during the trial that his Englewood, Colo., company was better equipped to compete than Sprint. His new wireless service will ride over T-Mobile’s network at first, though customers will eventually use a new cellphone system Dish is required to build over seven years.

Quotes from opponents of the deal:

“We are profoundly disappointed that the judge approved a merger that will harm communities of color and low-income communities across California,” said Greenlining Institute Technology Equity Director Paul Goodman, in a statement.

“While the court may think it unlikely for a newly entrenched trio of enormous wireless carriers to collude rather than compete, the history of broken and abandoned merger promises from these companies – to say nothing of the mountains of evidence and expert analysis in this trial – say otherwise,” said Free Press Vice President of Policy and General Counsel Matt Wood, in a statement.

“The Rural Wireless Association disagrees with Judge Marrero’s decision to approve this deal, which has been consistently and drastically altered from what was originally proposed in early 2018, and now includes Dish, a company that has zero experience operating as a facilities-based mobile wireless carrier network as the savior for wireless competition,” the association said in a statement.

Quotes from supporters of the deal:

“I’m pleased with the district court’s decision. The T-Mobile-Sprint merger will help close the digital divide and secure United States leadership in 5G,” said FCC Chairman Ajit Pai in a statement.

“We appreciate Judge Marrero’s thorough evaluation of this merger. The ruling, in addition to the DOJ and FCC approvals, accelerates our ability to deploy the nation’s first virtualized, standalone 5G network and bring 5G to America,” said Dish Network’s Charlie Ergen in a statement. “We are eager to begin serving Boost customers while aggressively growing the business as a new competitor, bringing lower prices, greater choice and more innovation to consumers. We look forward to the Boost employees and dealers joining the Dish family.

Analyst Opinions:

“This is clearly a big win for T-Mobile, which will now how [sic] a superior spectrum position which it can use to launch 5G and handle even higher growth,” wrote the Wall Street research analysts at Lightshed in a post. “We also see this as a big win for Dish based on what we have learned about its MVNO terms. It’s not great news for Verizon, given that it removes Sprint and Dish’s spectrum as an alternative, created a new competitor in Dish and has empowered T-Mobile with the tools to deliver a superior network experience to consumers.”

“We view a deal as initially negative to AT&T/Verizon despite our view that consolidation should help to further rationalize the competitive/pricing environment long term considering T-Mobile is likely to be aggressive at least early on to help validate the premise of the deal which is it will result in more favorable pricing for consumers,” wrote the Wall Street analysts at Cowen in a note to investors.

“Dish will need to execute on a myriad of levels including building a cloud-native nationwide network followed by the operational challenges that come with competing against three very well entrenched wireless players,” the Cowen analysts added.

“The wireless industry is going to get tougher. Cable would have had a much easier time sucking subscribers out of Verizon and AT&T in a four-carrier market with a capacity constrained T-Mobile. Now they are going to have to fight T-Mobile for every one of those subs, and industry pricing is likely headed lower,” wrote the Wall Street analysts at New Street Research in a note to investors.

However, the New Street analysts pointed out that cable companies may also see some silver lining in the merger of Sprint and T-Mobile, if it is ultimately approved. “Cable will have one more company competing for its MVNO business. We have been surprised the companies haven’t announced new MVNO terms with Verizon or AT&T; negotiations were in full force in October / November last year. Perhaps they have been waiting to see what T-Mobile might offer them if the deal went through. Altice will be the most immediate winner; their MVNO with Sprint now moves to a much better network.”

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Addendum from  Robin Hood Snacks:

Here’s the history of this complex courtship:

  • June 2018: T-Mobile’s CEO announces that his company has agreed to merge with Sprint. The combo company – valued at $146B – would be split between 3 owners: Deutsche Telekom (T-Mobile’s parent), SoftBank (which owns most of Sprint), and retail investors like you and us who own remaining shares.
  • November 2019: The Department of Justice and the Federal Communications Commission approve the merger under certain conditions… But 13 states plus DC sued to block the deal, saying it would hurt competition and lead to pricier phone bills.

Sprint has been lagging rivals for a while… so the judge doesn’t think this deal will substantially hurt competition. Plus, regulators will make sure that Dish Network enters the game as a viable new service provider. Sprint will have to sell Dish 9M customers, but that’ll still be a distant competitor to the Big 3.

THE TAKEAWAY

We have a three-opoly on our hands… Here’s the pecking order now: Verizon #1, New T-Mobile #2, and AT&T #3. And a three-opoly could affect your bill:

  • Interpretation A: Competition has been reduced, now that we’ve gone from 4 major players to 3. When there’s less competition, companies tend to charge higher prices.
  • Interpretation B: Actually, this merger increases competition, because Sprint was never a real player and T-Mobile wasn’t big enough to compete over future 5G networks. Now T-Mobile + Sprint can effectively challenge AT&T and Verizon.

 

 

T-Mobile Earnings Beat + 5G Network Status + 600 MHz and Spectrum Position

T-Mobile US beat analysts’ estimates for quarterly revenue and profit on Thursday, as the wireless carrier added more mobile phone subscribers to its monthly plans, some of which come bundled with a Netflix Inc service.

The third-largest U.S. wireless carrier by subscribers has been awaiting a decision on its proposed merger with Sprint Corp. The two U.S. telcos delivered closing arguments in a federal court last month against a multi-state lawsuit that argues the merger will increase prices for the consumers.

T-Mobile’s fourth-quarter net income rose to $751 million from $640 million, a year earlier. Excluding items, the company earned 87 cents, beating analysts’ average estimate of 83 cents. Revenue rose to $11.88 billion from $11.45 billion, edging past analysts’ average estimate of $11.83 billion, according to IBES data from Refinitiv.

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Highlights from the T-Mobile Investor Factbook website:

Strong Customer Growth:
• 1.9 million total net additions in Q4 2019 – 7.0 million in 2019 – 6th year in a row of more than 5 million total net additions
• 1.3 million branded postpaid net additions in Q4 2019, best in industry – 4.5 million in 2019, best in industry
• 1.0 million branded postpaid phone net additions in Q4 2019, best in industry – 3.1 million in 2019, best in industry
• 77,000 branded prepaid net additions in Q4 2019 – 339,000 in 2019
• Branded postpaid phone churn of 1.01% in Q4 2019, up 2 bps YoY – 0.89% in 2019, down 12 bps from 2018

First Nationwide 5G Network:
• Launched the first nationwide 5G network utilizing 600 MHz spectrum, forming the foundational 5G coverage layer for
New T-Mobile; network covers more than 200 million people and more than 5,000 cities and towns
• 4G LTE on 600 MHz now covers 248 million people and 1.5 million square miles
• Currently, more than 33 million 600 MHz compatible devices already on our network

Strong Standalone Outlook for 2020:
• Branded postpaid net additions of 2.6 to 3.6 million
• Net income is not available on a forward-looking basis(2)
• Adjusted EBITDA target of $13.7 to $14.0 billion, which includes leasing revenues of $450 to $550 million
• Cash purchases of property and equipment, including capitalized interest of approximately $400 million, are expected
to be $5.9 to $6.2 billion. Cash purchases of property and equipment, excluding capitalized interest, are expected to
be $5.5 to $5.8 billion
• In Q1 2020, pre-close merger-related costs are expected to be $200 to $300 million before taxes
• Net cash provided by operating activities, excluding payments for merger-related costs and any settlement of interest
rate swaps, is expected to be in the range of $7.9 to $8.5 billion
• Free Cash Flow, excluding payments for merger-related costs and any settlement of interest rate swaps, is expected
to be in the range of $5.4 to $5.8 billion

Total Customers:
• Total net customer additions were 1,863,000 in Q4 2019, compared to 1,747,000 in Q3 2019 and 2,402,000 in Q4 2018. This is the 27th consecutive quarter in which TMobile added more than one million total net customers.
• T-Mobile ended Q4 2019 with 86.0 million total customers, of which 67.9 million were total branded customers.
• For the full-year 2019, total net customer additions were 7,011,000 compared to 7,044,000 in 2018. This was the sixth consecutive year in which total net customer additions exceeded 5 million.
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5G NETWORK:

On December 2, 2019, T-Mobile launched America’s first nationwide 5G network, including prepaid 5G with Metro by T-Mobile, covering more than 200 million people and more than 5,000 cities and towns across over 1 million square miles with 5G. In addition, we introduced two new 600 MHz 5G capable superphones, the exclusive OnePlus 7T Pro 5G McLaren and the Samsung Galaxy Note10+ 5G and anticipate offering an industry-leading smartphone portfolio built to work on nationwide 5G in 2020. This 5G network is our foundational layer of 5G coverage on 600 MHz low-band spectrum.

Should we close our merger with Sprint, we will rapidly deploy 5G on Sprint’s 2.5 GHz spectrum, completing the “layer cake” of spectrum and providing consumers with an unmatched 5G experience. On June 28, 2019, T-Mobile introduced its 5G network using high-band millimeter wave (mmWave) spectrum in conjunction with the introduction of our first 5G handset, the Samsung Galaxy S10 5G. The 5G network on mmWave spectrum has been rolled out in parts of seven cities (New York City, Los Angeles, Dallas, Atlanta, Cleveland, Las Vegas and Miami).

600 MHz Spectrum:

  • At the end of Q4 2019, T-Mobile owned a nationwide average of 31 MHz of 600 MHz low-band spectrum. In total, T-Mobile owns approximately 41 MHz of low-band spectrum (600 MHz and 700 MHz). The spectrum covers 100% of the U.S.
  • As of the end of Q4 2019, T-Mobile had cleared 275 million POPs and expects to clear the remaining 600 MHz spectrum POPs in 2020.
  • T-Mobile continues its deployment of LTE on 600 MHz spectrum using 5G-ready equipment. At the end of Q4 2019, we were live with 4G LTE in nearly 8,900 cities and towns in 49 states and Puerto Rico covering 1.5 million square miles and 248 million POPs.
  • Combining 600 and 700 MHz spectrum, we have deployed 4G LTE in low-band spectrum to 316 million POPs.
    Currently, more than 33 million devices on T-Mobile’s network are compatible with 600 MHz spectrum.

Spectrum Position:

  • At the end of Q4 2019, T-Mobile owned an average of 111 MHz of spectrum nationwide, not including mmWave spectrum. The spectrum comprises an average of 31 MHz in the 600 MHz band, 10 MHz in the 700 MHz band, 29 MHz in the 1900 MHz PCS band, and 41 MHz in the AWS band. On June 3, 2019, the FCC announced the results of Auctions 101 (28 GHz spectrum) and 102 (24 GHz spectrum). In the combined auctions, T-Mobile spent $842 million to more than quadruple its nationwide average total mmWave spectrum holdings from 104 MHz to 471 MHz.
  • We will evaluate future spectrum purchases in upcoming auctions and in the secondary market to further augment our current spectrum position. We are not aware of any such spectrum purchase options that come close to matching the efficiencies and synergies possible from merging with Sprint.

Network Coverage Growth:

  • T-Mobile continues to expand its coverage breadth and covered 327 million people with 4G LTE at the end of Q4 2019.
  • At the end of Q4 2019, T-Mobile had equipment deployed on approximately 66,000 macro cell sites and 25,000 small cell/ distributed antenna system sites.

Network Capacity Growth:

  • Due to industry spectrum limitations (especially in mid-band), T-Mobile continues to make efforts to expand its capacity and increase the quality of its network through the re-farming of existing spectrum and implementation of new technologies including Voice over LTE (“VoLTE”), Carrier Aggregation, 4×4 multiple-input and multiple-output (“MIMO”), 256 Quadrature Amplitude Modulation (“QAM”) and License Assisted Access (“LAA”).
  • VoLTE comprised 90% of total voice calls in Q4 2019, flat with 90% in Q3 2019 and up from 87% in Q4 2018. Carrier aggregation is live for T-Mobile customers in 969 markets, up from 956 markets in Q3 2019 and 923 in Q4 2018.
  • 4×4 MIMO is currently available in 708 markets, up from 683 markets in Q3 2019 and 564 in Q4 2018.
  • T-Mobile customers have 256 QAM available across the Un-carrier’s entire 4G LTE footprint.
    Source: Opensignal USA Mobile Network Experience Report January 2020, based on data collection period from 9/16/2019 to 12/14/2019
  • T-Mobile is the first carrier globally to have rolled out the combination of carrier aggregation, 4×4 MIMO and 256 QAM. This trifecta of standards has been rolled out to 701 markets, up from 674 markets in Q3 2019 and 549 markets in Q4 2018.
  • LAA has been deployed to 30 cities including Atlanta, Austin, Chicago, Denver, Houston, Las Vegas, Los Angeles, Miami, New Orleans, New York, Philadelphia, Sacramento, San Diego, Seattle, and Washington, DC.

Network Speed:

  • Based on data from Opensignal for Q4 2019, T-Mobile’s average download speed was 25.8 Mbps, AT&T at 27.5 Mbps, Verizon at 25.3 Mbps, and Sprint at 23.9 Mbps.
  • Based on data from Opensignal for Q4 2019, T-Mobile’s average upload speed was 8.6 Mbps, compared to Verizon at 7.9 Mbps, AT&T at 6.0 Mbps, and Sprint at 2.7 Mbps.

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References:

https://investor.t-mobile.com/financial-performance/quarterly-results/default.aspx

https://www.youtube.com/watch?v=CHPuI289U-Q&feature=youtu.be

https://www.reuters.com/article/us-t-mobile-us-results/t-mobile-beats-quarterly-estimates-as-sprint-merger-decision-looms-idUSKBN2002V9

 

Justice Dept approves the “New T-Mobile” via Sprint merger; Dish Network becomes 4th U.S. wireless carrier with focus on 5G

The Justice Department approved T-Mobile US Inc. ’s merger with Sprint Corp. after the companies agreed to create a new wireless carrier by selling assets to satellite-TV provider Dish Network Corp.  The federal approval for T-Mobile and Sprint caps a more than yearlong review of a combination that fell apart twice in the past five years over terms of the deal or fears that the Justice Department would object.

The landmark antitrust agreement seeks to address concerns that the combination of T-Mobile, the nation’s No. 3 carrier by subscribers, and No. 4 Sprint will drive up prices for consumers. It would leave more than 95% of American cellphone customers with the top three U.S. operators.

A deal brokered by the Justice Department will require Dish, which has been sitting on valuable airwaves, to build a 5G network for cellphone customers. To help it get started, T-Mobile will sell Sprint’s prepaid brands to Dish and give access to its network for seven years.

“The remedies set up Dish as a disruptive force in wireless” with the pieces needed for the company to have a cellphone service that is ready to go, Makan Delrahim, the Justice Department’s antitrust chief, said in a news conference.

Critics of the arrangement include a group of state attorneys general that broke with the Justice Department and have filed an antitrust lawsuit seeking to block the more than $26 billion merger. Five states that weren’t part of the lawsuit joined the federal government in the settlement announced Friday.

“Why scramble so much to create a fourth competitor when you already have one?” said Samuel Weinstein, an assistant law professor at the Cardozo School of Law at Yeshiva University who worked previously in the Justice Department’s antitrust unit.

The deal gives Dish Network, a satellite-TV provider, about nine million Sprint prepaid cellphone customers and additional wireless spectrum. Those subscribers, which mostly come from its Boost Mobile business, represent about one-fifth of Sprint’s customer base. Dish’s service, which could keep the Boost brand or take on a new name, would also be able to move from pay-as-you-go plans to postpaid service, which tends to be more profitable.

T-Mobile and Sprint must also give Dish access to at least 20,000 cell sites and hundreds of retail locations. The new T-Mobile must provide “robust access” to its network, the Justice Department said.  Please see comments on Dish in the box below this article.

The union of T-Mobile and Sprint, years in the making, would create a wireless company surpassing 90 million U.S. customers, closing the gap with Verizon Communications Inc. and AT&T Inc., which each have roughly 100 million wireless customers. It also would fulfill a long-held goal of Japan’s SoftBank Group Corp., which owns most of Sprint, and Deutsche Telekom AG, which controls T-Mobile.

T-Mobile and Sprint currently use separate frequencies, often requiring different cell towers:

Under the merger:

  • Dish rents capacity from the new T-Mobile, creating a new carrier to serve Boost Mobile customers and giving it time to build its own network.
  • After seven years, Dish runs its own network using spectrum from its past acquisitions and its own equipment installed on fewer towers.

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Federal Communications Commission Chairman Ajit Pai, who had previously backed the deal, said Friday the Justice Department settlement, coupled with T-Mobile and Sprint’s earlier commitments to deploy a nationwide 5G network, will preserve competition and advance U.S. leadership in rolling out next-generation networks.

In its agreement with the government, T-Mobile promised not to raise prices for three years and cover 97% of the U.S. population with 5G service in three years.   T-Mobile has been adding millions of customers at the expense of its rivals, pushing unlimited data plans and lower prices than the incumbents. Sprint, despite owning valuable airwaves, has been shedding millions of subscribers and has struggled to be profitable.

T-Mobile surpassed Sprint to become the number three wireless carrier by subscribers and argued the acquisition of the smaller carrier’s airwaves would help speed its deployment of a 5G network so that it could better compete with Verizon and AT&T.  U.S. carriers have been battling for customers in the $180 billion wireless voice-and-data market, where growth has slowed now that the companies have rolled out unlimited data plans and most Americans have upgraded to smartphones.

 

Dish will scrap its NB-IoT plan and focus purely on 5G, which the U.S. government has always wanted, according to a person familiar with the matter. (Dish hasn’t totally abandoned its old plan yet because the deal still hasn’t closed).  Dish must build a 5G network that covers 20% of the U.S. population by 2022 and 70% by 2023. If it can’t reach that goal, Dish will have to pay a $2.2 billion penalty to the U.S. Treasury.
Merger Being Challenged:
A group of states led by the attorneys general of New York and California are pressing ahead with an antitrust lawsuit seeking to block the combination, saying it would harm consumers. All the officials who joined the suit are Democrats; those who decided to support the Justice Department on Friday are Republicans.

Letitia James, the New York attorney general, said the proposed merger would cause harm to consumers nationwide. “To be clear: The free market should be picking winners and losers, not the government, and not regulators,” she said during a call with reporters. Ms. James said Dish lacks the experience to operate a nationwide mobile network.

Mr. Delrahim said his office will share its settlement with the federal judge overseeing the states’ lawsuit. “Sometimes independent sovereigns do make independent determinations,” he said. A trial is expected later this year. On Friday, T-Mobile and Sprint extended the deadline to close their deal, from July 29 to Nov. 1.

The Justice Department stopped sharing information with the Democratic attorneys general after they decided to file their lawsuit in June without notifying their federal counterparts, Mr. Delrahim said. “That was their choice, not ours,” he said.

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T-Mobile said it expects to close its Sprint purchase in the second half of this year despite the states’ lawsuit.  Under the deal, Dish will pay $1.4 billion for the Sprint customer accounts, most of which come from its Boost prepaid brand, and $3.6 billion three years later to buy Sprint spectrum licenses in the 800-megahertz range, which can travel long distances and cover rural areas.

The new T-Mobile will have the option to lease back part of that spectrum for an additional two years after the airwaves sale closes. The companies have also agreed to negotiate for T-Mobile to lease Dish spectrum in the 600-megahertz range.

Dish is set to start its wireless life with a base of Sprint’s pay-as-you-go customers, though carriers often struggle to keep those so-called prepaid subscribers. More than 4% of Sprint’s prepaid customers choose to drop their service or are disconnected for nonpayment each month, according to company filings.

The deal creates a fake competitor, said Andrew Jay Schwartzman, a lecturer at Georgetown Law, adding that even if Dish builds out its own network it will take years. During that time, the three large carriers will be able to introduce 5G and lock in their subscriber bases, he said.

“Rather than having Sprint as a weak fourth competitor, the combined companies will now face an extremely weak fourth competitor,” Mr. Schwartzman said.

Sprint ended March with nearly $33 billion of net debt on its balance sheet. Even though it had more than 40 million customers, Sprint said during deal negotiations that it was in poor health and wouldn’t be able to launch nationwide 5G service without the merger.

Dish has argued it can build a better network by starting from scratch. Even before he pursued a deal with the Justice Department, Dish Chairman Charlie Ergen said his business could invest capital more efficiently without the burden of old equipment and software holding back its ambitions. Dish hasn’t made public the prices or structure of the wireless plans it will sell.

“These developments are the fulfillment of more than two decades’ worth of work and more than $21 billion in spectrum investments intended to transform Dish into a connectivity company,” Dish CEO Ergen said in a press release. “Taken together, these opportunities will set the stage for our entry as the nation’s fourth facilities-based wireless competitor and accelerate our work to launch the country’s first standalone 5G broadband network.”

Dish says:

The 800 MHz nationwide spectrum adds to Dish’s existing 600 MHz and 700 MHz low-band holdings. The low-band portfolio, well suited for wide geographic coverage and in-building penetration, complements Dish’s AWS-4 and AWS H Block mid-band offerings, which promise high data capacity potential with narrower operating range.

Dish has committed to new buildout schedules associated with the company’s 600 MHz, AWS-4, 700 MHz E Block and AWS H Block licenses. In addition, DISH has committed to deploy 5G Broadband Service utilizing those licenses.

Senior FCC officials said on a call with reporters that they are confident the new carrier under Dish will be viable because the wholesale deal it has struck with the new T-Mobile is more aggressive than any other such arrangement the carrier and Sprint currently have. Its terms give Dish the financial ability to compete in the prepaid market against T-Mobile’s Metro brand, they said.   The settlement also included provisions designed to make sure Dish actually builds the promised infrastructure. Among other penalties, Dish agreed to pay the government up to $2.2 billion if it fails to meet its network expansion requirements.

Following the closing of T-Mobile’s merger with Sprint and subsequent integration into the New T-Mobile, DISH will have the option to take on leases for certain cell sites and retail locations that are decommissioned by the New T-Mobile for five years following the closing of the divestiture transaction, subject to any assignment restrictions. The companies have also committed to engage in good faith negotiations regarding the leasing of some or all of DISH’s 600 MHz spectrum to T-Mobile.

The completion of the T-Mobile and Sprint combination remains subject to remaining regulatory approvals and certain other customary closing conditions. T-Mobile and Sprint expect to receive final federal regulatory approval in Q3 2019 and currently anticipate that the merger will be permitted to close in the second half of 2019. Additional information can be found at www.NewTMobile.com.

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Addendum from WSJ Editorial Board July 27, 2019 print edition:

The Justice Dept has rescued Dish Chairman Charlie Ergen from his bet of buying wireless spectrum but keeping it idle. Mr. Ergen loudly opposed the merger, and his reward was the chance to buy Sprint’s pre-paid customers at a bargain price and have access to 20,000 T-Mobile-Sprint cell sites and hundreds of retail locations. But Dish has no experience running a wireless network, and it will take years to build one even as the Big Three invest to gain an edge in 5G wireless…………………………………………………..

A  strong third competitor will be good for consumers and 5G deployment in the U.S. The combined company should force Verizon and AT&T to focus on 5G rather than dabbling in content acquisitions like Time Warner. Three strong competitors are better than two.

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FCC Comments:

“That’s a real significant win for U.S. leadership in 5G. It’s been my top priority. It’s been a big priority for the Trump administration. And by accelerating 5G build-out through this deal, 99% of Americans are going to see 5G faster,” FCC Commissioner Carr said.

In addition to the Justice Department, FCC Chairman Ajit Pai announced support for the more than $26 billion merger in May. The deal still faces a lawsuit from 13 state attorneys general and the District of Columbia that seeks to block it.

https://www.cnbc.com/2019/07/26/fcc-official-clearance-of-sprint-t-mobile-deal-is-significant-win.html

 

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References:

https://www.wsj.com/articles/justice-department-approves-merger-of-t-mobile-us-and-sprint-11564155026

https://www.t-mobile.com/news/t-mobile-sprint-merger-doj-clearance

https://www.cnbc.com/2019/07/26/dish-network-finally-has-a-plan-for-a-new-wireless-network.html

https://techblog.comsoc.org/2018/08/03/dish-network-on-track-for-5g-build-out-phase1-is-nb-iot/

T-Mobile mmWave 5G to be available in six cities on June 28th along with Samsung Galaxy S10 5G smartphone

T-Mobile US has announced it will use millimeter wave (mmWave) spectrum to offer up “pre-standard 5G” services in parts of six cities beginning on June 28th.  Sales of the Samsung Galaxy S10 5G will commence that same day (see References below). The company published detailed coverage maps showing where subscribers in Atlanta, Cleveland, Dallas, Las Vegas, Los Angeles and New York can expect to access their 5G network.

T-Mobile has said its plan for nationwide coverage hinges on its vast portfolio of 600 MHz spectrum, but the “Un-carrier” also has its own stash of high-band frequencies. Sprint activated its mobile 5G offering using mid-band 2.5 GHz spectrum. The complementary aspects of Sprint’s and T-Mobile’s spectrum is a key piece of the pending $26.5 billion merger, which is awaiting regulatory approval which may be delayed due to several states filing opposition lawsuits.

 

T-Mobile US CEO John Legere, has been highly critical of AT&T’s and Verizon’s millimeter wave-based 5G deployments (particularly the lack of coverage maps). He wrote in a June 20th blog post that the “New T-Mobile” (merged with Sprint) could deliver the range of spectrum needed for 5G.

Current 5G networks in the U.S. aren’t anything to write home about. That’s because they’re mostly focused on high-band millimeter wave (mmWave) spectrum, which doesn’t travel far from the cell site and is blocked by things like trees, windows and doors. It’s a massively important part of 5G, don’t get me wrong, but it’s just that – a PART. We’ve been clear all along… real, game-changing 5G will require a range of spectrum – low, mid and high – and only the New T-Mobile will be able to deliver it.”

Legere stated that the “New T-Mobile” (merged with Sprint) would be better able to deliver 5G because:

  • We’ve got the high-band spectrum with mmWave, which delivers massive capacity over a very small footprint.
  • Later this year, when compatible smartphones launch, we’ll launch broad 5G on our low-band 600 MHz spectrum, providing the wide area coverage necessary to reach across America.
  • If regulators approve our merger with Sprint, we’ll have the crucial mid-band spectrum (2.5 GHz), which provides the balance of coverage and capacity that enables a seamless and meaningful 5G experience. Mid-band spectrum is key to providing an ideal mix of coverage and capacity for 5G networks, and the combination of Sprint’s mid-band and our low-band will allow New T-Mobile to use both spectrum more efficiently, increasing capacity even more.

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T-Mobile said it will use “Multi-band Dual Connectivity” to aggregate “5G in the millimeter wave band and LTE.”

T-Mobile plans to launch a larger 5G network later this year using the low-band 600Mhz 5G spectrum, a technology not supported by the Galaxy S10 5G.  5G smart phones that support both mmWave and the low-band spectrum are expected later this year.

However, critical infrastructure for mmWave 5G will require many more small cells (due to limited range)  that will need to be mounted on mainly local (public) government property with fiber backhaul.  We wonder why that gating item is hardly ever discussed on line or in the telecom business press?  It is probably why T-Mobile’s 5G mmWave coverage is extremely limited as you can see from their coverage maps.

References:

https://www.t-mobile.com/news/samsung-galaxy-s10-5g

https://www.t-mobile.com/5g

https://www.tmonews.com/2019/06/t-mobile-galaxy-s10-5g-launch-network-six-cities/

 

2019 IoT World: T-Mobile is Changing the Game for Massive IoT via NB-IoT

Introduction:

T-Mobile USA was the first U.S. wireless carrier to provide nationwide NB-IoT coverage last July.  The “uncarrier” is very proud to have 81 million cellular customers and a very low churn rate.  The company has invested billions of dollars in the last five years to modernize and transform its wireless network. As of February 7, 2019,  T-Mobile’s LTE network now covers 325 million people, according to a recent earning report..

During his May 14th 2019 IoT World keynote, Balaji Sridharan, VP of IoT & M2M at T-Mobile US, described the challenges to overcome to realize massive IoT at scale and T-Mobile’s wireless networks that might be used for three different classes of IoT connectivity.  Balaji also enumerate key features and attributes of NB-IoT and showed an interesting comparison chart of LPWANs.  He said its 600 MHz spectrum is deployed throughout the U.S.  [1]

Note 1.  During its April 2019 earnings call, CTO Neville Ray said: “we have over 1 million square miles of 600 megahertz LTE rolled out.  It’s working in 44 states and Puerto Rico. And we have a 100 million covered PoPs on 600 megahertz LTE. So we’ve said that in 2020, we’ll have a nationwide footprint on 5G. 

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IoT Classification and Characteristics [from Ericsson white paper]:

Massive IoT: Connecting billions of devices, small amounts of data volumes, (mostly) sent infrequently, low power required for long battery life (years not days, weeks or months).

Broadband IoT will need high throughput and/or low latency.; large data volumes.

Critical IoT will require ultra high reliability/availability and very low latency.  Industrial automation (and robotic surgery) will require time sensitive information delivery and precise positioning of devices.

Industrial Automation is tailored for advanced industrial automation in conjunction with the other cellular IoT segments. It includes Radio Access Network (RAN) capabilities to facilitate the support of deterministic networks which, together with ethernet-based protocols and other industrial protocols, will enable many advanced industrial automation applications. 

These applications have extremely demanding connectivity requirements and require very accurate indoor positioning and distinct architecture and security attributes. Industrial Automation IoT reinforced by Critical IoT connectivity is the key enabler for the full digitalization of Industry 4.0 for the world’s manufacturers, the Oil and Gas sectors as well as smart grid components for energy distribution companies. 

Figure 1: Cellular IoT segments

Above chart courtesy of Ericsson.

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T-Mo has wireless networks to meet all of the above IoT market segmants.  In particular, NB-IoT, 4G-LTE, and (soon) 5G.

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Challenges to overcome for Massive IoT:

  • Support billions of devices at scale (that includes provisioning and (re) configuration).
  • Long battery life (via low power consumption of devices/things)
  • Coverage enhancements
  • Global reach

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NB-IoT meets the requirements for Massive IoT:

Operates in guard bands of T-Mobile’s LTE network. [2]

Wide range of devices to be connected to the Internet using existing mobile networks (rather then new network infrastructure).

Key benefits include:  better battery life (again via low power consumption for connectivity), cheaper device costs ($5 certified NB-IoT module is now available), optimized data usage, reduced IP header and ability to transmit/receive non-IP data (which results in 30% to 40% less data transmission than if traditional IP was used), enhanced security via GSMA standards, licensed spectrum (no interference),, SIM based, and encryption.

Balaji said: “Improved network coverage is achieved via repetitions, which are used to enhance coverage.”  [3.]

Note 2. NB-IoT can also be implemented in “standalone” for deployments in dedicated spectrum.

Note 3. From an IEEE published paper titled: Enhancing Coverage in Narrow Band-IoT Using Machine Learning:

NB-IoT needs only a small portion of the existing available cellular spectrum to operate without interfering with it. Hence, NB-IoT provides more reliability and more quality of service (QoS) as it operates in regulated spectrum. Moreover, NB-IoT uses existing cellular network infrastructure, which reduces the deployment costs.

However, since repeating transmission data and control signals has been selected as a major solution to enhance coverage of NB-IoT systems, this leads to reducing the system throughput and thereby a spectral efficiency loss.

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Here’s a comparison chart showing: 2G,  licensed spectrum NB-IoT vs unlicensed band Sigfox and LoRa (WAN):

Chart courtesy of T-Mobile USA

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Balaji highlighted several Massive IoT applications that could effectively  use NB-IoT for connectivity.  Those include: asset tracking, smart metering, smart lighting, equipment monitoring, smart packaging, and intelligent waste management.

In addition to the $5 NB-IoT modules now available Balaji revealed T-Mo has a $5/year NB-IoT service plan.  

T-Mo hosted the U.S.’ first NB-IoT Hackathon to develop IoT applications that would leverage NB-IoT as a viable wireless network.  Sensing the presene of forest fires was an example he provided.

T-Mo partnered with Twillio to get NB-IoT to market.  They created a new development kit that allowed Hackathon participants to access the NB-IoT network.  [4.]

Note 4.  More than 100 new and seasoned developers descended on T-Mobile HQ to help shape the future of NB-IoT at the Hackathon.  20 creative and unique IoT concepts for prospective IoT solutions emerged that could leverage the low cost and power efficiency of NB-IoT and its reliability over long distances.

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U.S. Carrier Comparison for NB-IoT Deployments:

T-Mobile launched its NB-IoT network last July. AT&T’s NB-IoT network went live two weeks ago. Sprint said it is testing NB-IoT technology, but it plans to merge with T-Mobile in the not-too-distant future so may not roll out its own NB-IoT offering.

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NB-IoT Chipset Forecast:

Research & Markets predicts the NB-IoT chipset market is expected to grow from USD 272 million in 2019 to USD 2,002 million by 2024 at a CAGR of 49.1%.

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References:

https://www.t-mobile.com/news/americas-first-narrowband-iot-network

https://iot.t-mobile.com/narrowband/

https://techblog.comsoc.org/2019/04/27/t-mobile-u-s-profit-beats-estimates-plan-to-launch-5g-on-600-mhz-in-2h-2019/

https://www.gsma.com/iot/wp-content/uploads/2018/04/NB-IoT_Deployment_Guide_v2_5Apr2018.pdf

https://iot.t-mobile.com/hackathon/

https://iot.t-mobile.com/wp-content/themes/T-Mobile/device_images/pdf_download/Whitepaper_NarrowBand_IoT_March2019.pdf

https://techblog.comsoc.org/2019/05/15/2019-iot-world-verizons-narrowband-iot-nb-iot-network-now-covers-92-of-u-s/

 

T-Mobile U.S. profit beats estimates; Plan to launch 5G on 600 MHz in 2H-2019

T-Mobile USA, the third-largest U.S. wireless carrier by subscriber count, beat Wall Street analysts estimates for first-quarter revenue and profit, as competitive pricing lured new subscribers to its monthly cellphone plans.  Net income surged to $908 million, or $1.06 per share, in the three months ended March 31, from $671 million, or 78 cents per share, a year earlier.  Analysts had expected the company to earn 91 cents per share, according to IBES data from Refinitiv.   Revenue rose nearly 6 percent to $11.08 billion, in line with estimates.

T-Mo added a net 656,000 phone subscribers in the first quarter, up from 617,000 additions a year earlier and substantially more than the 612,000 new subscribers analysts had expected, according to research firm FactSet.

The wireless telco is awaiting approval of its $26 billion deal to buy smaller rival Sprint Corp, which it has said will give it scale to compete with market leaders Verizon Communications Inc and AT&T Inc.

T-Mobile US Chief Executive John Legere said during a post-earnings call with analysts that he remained “optimistic and confident” that U.S. regulators would recognize the merger as good for consumers, and said he still expects deal approval in the first half of this year.

Reuters reported last week that the U.S. Justice Department has told T-Mobile and Sprint it has concerns about the merger in its current structure.  At a meeting on Wednesday, U.S. regulators questioned Sprint and T-Mobile executives about the deal.

John Legere, CEO of T-Mobile said: “We’re off to a fast start in 2019 with customer growth that accelerated year-over-year, record low churn and we expect to lead the industry in postpaid phone growth. We’re executing on our business plan and our guidance shows that we expect our momentum to continue.”

On the earnings call, Legere added:  “And even with Charter and Sprint left to report. T-Mobile still took an estimated 88% of the industry’s postpaid phone growth. We also put up a customer growth number that accelerated year-over-year, extended our streak of more than 1 million total net per quarter to six years and delivered an all time record low postpaid phone churn results of 0.88%, by the way, that churn number is better than AT&T and within 4 basis points of Verizon.”

The company claims they have Industry Leading Network Performance:

  • 99% of Americans now covered with a 4G LTE network that is second to none
  • Fastest combined average of download and upload speeds for 21 quarters in a row
  • Aggressive deployment of 600 MHz using 5G ready equipment, now reaching nearly 3,500 cities and towns
  • On track to have the first nationwide 5G network available next year

Legere speaking on the earnings call:

“We continued to expand our 4G LTE coverage and deliver industry-leading network performance. Our network now covers approximately 326 million Americans with 4G LTE. And now we have 600 megahertz and 700 megahertz low band spectrum deployed to 304 million people across the country. In terms of 4G LTE speeds for 21 quarters in a row, we delivered the fastest combined average of download and upload speeds.

Our engineering team is hard at work building the foundation for America’s first real nationwide 4G network with an aggressive build out of 600 megahertz spectrum, which we expect to be ready next year as well as millimeter wave. Our 600 megahertz LTE deployment is on equipment that’s 5G ready. And we continue to make incredible progress since getting our hands on the spectrum. Almost 3,500 cities and towns in 44 states and Puerto Rico alive with LTE on 600 megahertz today, well ahead of expectations.

And we have 4,600 megahertz capable devices in our lineup today including the new iPhones. We plan to launch 5G on 600 megahertz as soon as we have compatible smart phones in the second half of this year. And if our merger with Sprint is approved, we will get access to unmatched available mid-band spectrum for 5G, which will result in a uniquely powerful 5G network with eight times the capacity by 2024 of the combined standalones today and 15 times average speeds by 2024 verses today.

We certainly watched Verizon’s 5G launch experiment on millimeter wave spectrum in tiny pockets of two cities with interest. Not surprisingly, customers are having a hard time finding a signal. And probably not just because Verizon won’t publish a coverage map. And I won’t even get into that trickery AT&T is using with customers on 5GE. While they both are pursuing 5G BS, we think 5G should be for everyone, everywhere. Having 5G on 600 megahertz in terms of coverage and adding Sprint spectrum for broad capacity will be a true game changer and will turn New T-Mobile into the undisputed 5G leader, not only in the U.S. but around the world. We remained very confident in our outlook for 2019 and it’s reflected in our guidance that Braxton will review in a minute.”

CTO Neville Ray answers a spectrum question from Simon Flannery of Morgan Stanley on the earnings call:

“As we’re rolling out 600 megahertz, we’re using 5G capable radio (3GPP Rel 15 “5G NR”). So obviously we’re taking new software on a regular basis, the 5G softwares coming in heavy and fast.

But here we are today, we’ve got over 1 million square miles of 600 megahertz LTE rolled out for across.  It’s working in 44 states and Puerto Rico. And we have a 100 million covered POPs on 600 megahertz LTE. So we’ve said that in 2020, we’ll have a nationwide footprint on 5G. And as we look at our launch environment, when we get the terminals in the second half of 2019, we’re going to be lighting up an enormous footprint on 5G, an enormous footprint on 600 megahertz.

And we have a lot of spectrum as you point out. We were incredibly successful in the auction, which seems like yesterday, that was two years ago. And we intend to put down a very large three, four lane highway across the U.S. with 600 megahertz. And I think it’s going to be in stark contrast to the pockets of 5G that are out there today and very, very limited from AT&T and Verizon. And Verizon maybe doing more cities, but it seems to be a handful of sites in very urban environments with very limited range.

And we’re not sitting there just throwing rocks at millimeter wave. We believe in millimeter wave, but – and we will launch millimeter wave services ourselves. But I can tell you now the software is not mature. We continue to work with the same equipment and software as the Verizon guys have decided to launch and even have the goal to ask their customers to pay $10 bucks more a month to access wherever they could find it. I believe they pulled that back today. They’ve pulled back the $10 price like they were trying to force on people, but comparing contrast tens of millions of covered POPs with 5G to handfuls. That’s the excitement and scale of what we love to do with 5G. Not in 2020, but in 2019. And as soon as we can get those devices onto – and into our customer’s hands, we will.”

John Legere:

“I just editorialize, I’ve been doing this a long time, I’ve never seen a team move as fast to deploy spectrum as an excellent team that moved on this 600 MHz. Yes, we use to think that we are now across 3,500 cities and towns in 44 states and Puerto Rico, 1 million square miles of territory with 600 and all of that already 5G compatible. We talk about being the first one to be nationwide next year, a lot of times that’s defined as 200 million, maybe we’ll march past that. But here we are in April of 2019 already having accomplished that kind of a milestone. It’s amazing.”

Ray answers a multi-part question from Craig Moffett of MoffettNathanson LLC:

“I talked the lengths are about what we can do with 600 megahertz and obviously, as we light up, think about just on a standalone basis, lighting up 30 megahertz nationwide on top of the assets that we’ve deployed today. So speeds are absolutely going to move from the 30, 35 net averages, they that exist in the network today, into the 60s and 70s peak speeds are going to move well north probably not quite doubling where we are today, but into the hundreds of megabits per second.

That’s achievable, right. As you combine an aggregate, the 600 megahertz in with the mid-band spectrum that we have. So that’s a very interesting proposition. But it fails in comparison to what we can do with the New T-Mobile. And the rollout that we can achieve with 2.5 gigahertz and especially the amount of spectrum mid-band spectrum that we can push into 5G early, and address this need of mid-band 5G, which the world – the rest of the world is running with. Craig as you know, here in the U.S., we have this mid-band dilemma. We can solve that with the combination of T-Mobile and Sprint, and really move forward with a tremendous 5G experience with breadth and depth and all of the data and the fact points that John pointed out earlier in the messaging.

So that’s the piece I’m focused on. Obviously on a standalone basis, it’s a different world. But then that’s us and AT&T and Verizon and everybody else trying to figure out how do we move to that next level of performance with 5G in a world where the mid-band spectrum that’s needed to really drive that is not coming from auctions or from other sources in any real timeframe that’s comfortable for anybody.

But the combination of T-Mobile and Sprint creates that mid-band opportunity in a way that cannot be created in the U.S. marketplace over the coming years. That’s what’s so unique and exciting about the opportunity. And Craig, that’s where I spend my time. I’m thinking about that piece. I know we’ve got a very strong network. I’m adding a lot of 600 megahertz, a new spectrum to the asset that we have. So a lot of confidence there, but the excitement and the thing that we long for and look forward to is this combination of the Sprint.”

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References:

https://www.t-mobile.com/news/t-mobile-q1-2019-earnings

https://seekingalpha.com/article/4256978-t-mobile-us-tmus-ceo-john-legere-q1-2019-results-earnings-call-transcript?page=8

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