T-Mobile intends to cover 300 million PoPs (points of presence) with its Ultra Capacity 2.5 GHz spectrum by the end of 2023. Its rival, Verizon, recently moved up its Ultra Wideband (C-band) coverage goal to reach 175 million people by the end of 2022, with plans to reach 250 million by the end of 2024.
T-Mobile President of Technology Neville Ray boasted during a Morgan Stanley investor event Wednesday saying that he thinks his company is “the envy of our competition…no doubt.”
He added, “they are fervently trying to catch T-Mobile, which is way out in front in this 5G space.” When asked about future deployment plans, he declined to provide updates, saying that will occur during the next earnings round.
Per Ray, T-Mobile ended last year with 210 million people covered by its mid-band 2.5 GHz layer. That’s below its Extended Range 600 MHz low-band footprint, which is at 310 million PoPs. This kind of geographic coverage is about five times that of what Verizon has on its low-band spectrum using dynamic spectrum sharing (DSS) services, he said.
Part of the attractiveness of obtaining Sprint was for their 2.5 GHz spectrum. It’s been their number one priority and that’s helped them to reach almost 50% of its network traffic being on 5G now. Over 40% of T-Mobile’s postpaid smartphone devices are now 5G capable, according to Ray.
T-Mobile plans on quickly expanding its mid-band 5G footprint into rural and smaller town areas “in a very material way,” he said, noting that 40% of the U.S. is comprised of small markets and rural areas.
“We’re coming into town with, not a two-lane freeway. This is a 10-lane highway we’re laying down with massive 5G capacity,” Ray said. “It’s already happening. Where it’s happening, folks’ heads just spin … when they compare what they were paying and getting delivered to in those environments with what we now bring.”
T-Mobile is on track for covering 260 million by the end of this year and 300 million by the end of 2023. “Our competition has no announced plans to get even close to that,” he said.
260 million PoPs over 210 may not sound like a big increase, but that represents three times the geographic expansion. “So we did 3x this last year. We have to do 3x again to get to that 260. So a lot of sites coming in,” he said.
One advantage for T-Mobile is “the other guys are trying to start their engines on getting these deployment things moving. AT&T has not really even started,” he said, adding that AT&T is waiting for new 3.45 GHz gear. The FCC’s most recent auction was on the 3.45 GHz spectrum and winners were just announced in January.
Apple announced its newest iPhone yesterday, the SE model, but that doesn’t come with support for 3.45 GHz either, he noted. “It’s hard being in their position,” Ray said. “For AT&T, I think all their work is ahead.”
For reference, AT&T has said it should have 200 million PoPs covered that are using mid-band spectrum by the end of 2023. The carrier will likely provide updates at its investor event this Friday.
Ray said he thinks there’s a conscious decision on the part of his competitors to not bring 5G mid-band capability and capacity into more parts of the U.S. They’re going to have to reverse that at some point in time, however, he added.
“There’s a lot of catch-up the other guys have to do yet,” Ray said.
Ray was also asked about the upcoming 2.5 GHz auction. He noted that there are two types of 2.5 GHz spectrum – the Broadband Radio Service (BRS) and Educational Broadband Service (EBS). The EBS licenses are a primarily rural footprint, often referred to as “white spaces” on the map. This is what will come up for auction first.
T-Mobile already leases and owns a significant amount of EBS 2.5 GHz spectrum. T-Mobile, however, refuses to share the details of its leases with educational institutions, causing rivals like AT&T to threaten not to participate in the 2.5 GHz auction unless they know the lease terms.
Ray didn’t address any of that conflict directly. “We’ll be disciplined,” he said of T-Mobile’s approach to the auction. “We’ll look where there’s value, where the value exists for us,” he said, noting opportunities for fixed wireless. “We’ll see. I think there’s a lot to learn over the next three to four months once the rules get finalized.”
T-Mobile is in a position to decommission cell sites, due to its merger with Sprint, which is where it gains great cost advantages, or “synergies” as they say in corporate jargon. “We’re ahead on that plan too,” Ray said.