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T-Mobile US Set to Close 4G Network Coverage Gap and Leapfrog ahead of Verizon, AT&T with First 5G Footprint Nationwide—Using New 600 MHz Low band Spectrum

by Susan Welsh de Grimaldo | May 02, 2017

T-Mobile sets to Align 5G on Consumer and Consumer Mobility

As with 4G, nationwide coverage using low band spectrum will be essential for 5G. T-Mobile US today is the first US carrier out of the blocks to announce plans for a nationwide 5G footprint, with plans to build out in 600 MHz starting with LTE, with network equipment from Ericsson and Nokia that will be New Radio ready for 5G deployment in 2019-2020. The goal is to have a 5G “material footprint” complete in 2020, using a 5G coverage layer at 600 MHz supplemented by mid-range and millimeter wave spectrum. While T-Mobile will use a combination of mid-band and millimeter wave spectrum for massive throughput in urban areas, the 600 MHz band will enable more rapid coverage deployment in suburban and rural areas.  Like AT&T and Verizon, T-Mobile is actively testing millimeter wave 5G in the 28 GHz and 39 GHz bands, but until the recent auction it lacked a nationwide low band play for its network.

T-Mobile aims for big competitive strides with 600 MHz: The 600 MHz band is a big deal even for 4G, as it provides T-Mobile with the ability to reach closer to nationwide parity on coverage with the big two and close the network gap. T-Mobile has been outperforming on subscriber net adds, particularly for consumer smartphones, even without the full nationwide low band footprint. As Neville Ray, CTO of T-Mobile US noted on a call with industry analysts, “finally T-Mobile has asset advantage with low band coverage advantage” with its 600 MHz spectrum, noting the “massive ownership of low band spectrum duopoly”, which has been a critical structural issue in the US wireless nationwide competitive landscape until now. As CFO Braxton Carter said in March in an interview at Deutsche Bank, the top opportunity for T-Mobile beyond the current status quo competition with Verizon and AT&T is geographic expansion in the USA: ‘one third has been missing until now’.  In the Q1 2017 earnings call, Braxton further quantified the 600 MHz opportunity importance: “This (600 MHz) network expansion is providing us with the unique ability to grow our distribution footprint by 30 million to 40 million POPs. We plan to open an additional 3,000 stores this year, roughly 1,500 T-Mobile and an increase of 500 over our original goal, and 1,500 MetroPCS stores.”  This illustrates the size of the 600 MHz band opportunity for T-Mobile, and the importance of wider 4G rollout as a precursor to 5G. Braxton referenced what he sees as a ‘$20 price umbrella’ in competing with Verizon and AT&T, suggesting that when coverage is like for like, T-Mobile will then have a pricing advantage to tip the balance.

 T-Mobile has significantly enhanced its 4G network with Gigabit LTE features (LTE Advanced and Advance Pro features such as 4x4 MIMO, 256 QAM, 5 carrier aggregation). Samsung’s Galaxy S8 launch is the first device to tap into all three of these Gigabit LTE network features, and Samsung along with Qualcomm will play a lead role in getting 600 MHz smartphones on to the T-Mobile LTE network by end of 2017 as well. T-Mobile’s ability to get additional smartphones with 600 MHz band out into markets quickly will be important for its competition in markets where it lacks 700 MHz low band spectrum for better coverage, particularly as it uses this new positioning to target enterprises on a more equal mobile footing as AT&T and Verizon.

Neville, who touted T-Mobile as “First to market broad based 5G coverage”, says he loves the idea that they will steal 5G business as Verizon focuses on urban/suburban small cells build out. T-Mobile is also using small cells and Distributed Antenna Systems (DAS), which will form a strong capacity layer for enhanced mobile broadband  with 5G in urban areas, but sees macro deployments with low band as critical for many of the use cases it wants to pursue that require broad geographic coverage

Why move quickly to 5G in the 600 MHz band in 2019-2020, instead of keeping it as 4G as it will first be deployed in 2017? Even though the 31 MHz of spectrum at 600 MHz band is not the large swaths of bandwidth that 5G is targeted to address (unlike LTE), T-Mobile US CTO Neville Ray says a lot of the capabilities of 5G New Radio will come through in low band, such as spectral efficiency, connectivity capabilities for large quantities of devices, and battery life. These features will enable  a much broader range of use cases than LTE, particularly new areas of use cases in IoT that just are not feasible (or economical) with even evolved LTE or NB-IoT. This is particularly apparent when New Radio is combined with new 5G core network with network slicing capabilities—as 5G architecture is much more than just radio.  We were glad to hear Mark McDiarmid and Neville Ray stress that point of broader 5G architecture on the call with analysts to discuss the announcement. Mark also made a key point about 5G that should not be overlooked: most 5G devices, particularly smartphones, will be able to tap into 5G’s “tremendous flexibility” for radio technology supporting multiple bands. As his colleague Karri Kuopomakki added, “people often overlook multiconnectivity” – pointing out that devices will be able to be connected to both LTE and 5G domains at the same time, not just one or another. Thus T-Mobiles advancements in Gigabit LTE and the addition of LTE-U later this year will also strengthen their network for 5G devices.

5G for consumers: Grant Castle highlighted T-Mobile’s positioning on consumer opportunities with 5G, noting they “fully believe you need to bring 5G to the consumer.” He highlighted a use case of being able to track anything using the changed signaling structure and reduced power draw of 5G the enables modules that will be low power, low cost and last 10 years, and the ability to go after this use case only with ubiquitous coverage across the US with 5G “connective tissue” in low band spectrum. T-Mobile is building its 5G vision around adding value to consumers by “doing something different and meaningful and powerful”, says Neville, and plan to focus IoT not only on industrial use cases but on “stuff with real consumer power behind it”.

One area where we would disagree with T-Mobile: lay off the negative campaigning about Verizon and AT&T trials/planned use of 5G for fixed broadband – we see fixed broadband as a good use case for 5G, particularly as an early use case and suited for the millimeter wave bands. It is by no means the only or the “best” or biggest use case, but the benefit of 5G is its support for a wide range of use cases. Using fixed deployment trials is a solid way to gain more knowledge of 5G propagation in upper bands and address a real market need. (For example, see our report: “5G CAN deliver TV Service efficiently by leveraging New Radio (NR) with ‘Trunking’, vRAN, Small Cells & Backhaul etc.”)

Implications of T-Mobile’s announcement:

  • While commercial 5G competition, along with the supporting advanced LTE networks, is heating up in the US well before commercial launch – it is too early to tell which carrier(s) will win the early battles for uptake and 5G connections growth.
  • T-Mobile is closing the network coverage gap—even before 5G—and will be able to market with low band coverage in areas where it was not on par before. Other carriers will need to find new ways to differentiate to attract and retain customers, and keep on their toes on network quality as usage (video in particular) continues to grow with unlimited plans.
  • T-Mobile’s focus on consumer use cases will spur more innovation and ecosystem development, particularly around consumer IoT use cases.
  • Aggressive network deployment and push by T-Mobile on the device ecosystem to get 600 MHz handsets and modules with LTE leading up to its 5G rollout, and its early nationwide 5G push, will be beneficial for other winners of 600 MHz spectrum as T-Mobile does the heavy lifting of pushing for devices to work in that band.

Other related Strategy Analytics reports:

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