T-Mobile came in a distant third in the C band auction, but Neville Ray, T-Mobile’s president of technology, said he is convinced that its strategy was the best.
During the carrier’s annual Virtual Analyst Day, the T-Mobile executive explained the strategy that the carrier employed during the recent C band auction in which it acquired 40 megahertz of spectrum across the top markets. The company purchased C band frequencies to complement its already strong multi-layer spectrum portfolio, solidifying its mid-band position, he said.
“We invested smartly in C band to add to our ultra-capacity 5G in urban and suburban areas where our site density is high and can readily support ubiquitous outdoor coverage,” Ray said.
In the C band auction, T-Mobile spent $9.3 billion on 142 licenses, while Verizon led the pack by spending $45.4 billion on 3,511 licenses, followed by AT&T, which spent $23.4 billion on 1,621 licenses.
“Considering all that was spent by AT&T and Verizon, we still have more mid-band spectrum than either of them,” Ray said.
Ray said the propagation characteristics of the C band (3.3 GHz – 4.2 GHz) do not compare favorably with those of the 2.5 GHz, PCS (1850 MHz – 1990 MHz) and AWS-1 (1710-1755 and 2110-2155 MHz) spectrum bands.
“We felt that the C band specifically didn’t make sense for us to use on a nationwide basis, due to the necessary site densification, which is difficult to achieve,” Ray said. “By our estimates, to provide ubiquitous coverage, using the C band would require a full 1.5 times more sites than 2.5 GHz, and two times more sites than PCS and AWS spectrum.”
Powered by Synergies, Network Rolling Out Is Going Faster and Is Less Expensive
Ray said that the rollout of 5G wireless infrastructure is costing less and going faster than originally estimated. Savings have been realized in new radio products that support increased bandwidth. Their use has reduced overall radio count and decreased deployment time, he said. The rollout will be substantially completed by the end of 2023.
“We are also realizing significant savings from an efficient deployment engine, including adding multiple spectrum bands on a single site at the same time, as well as more effective controls reducing the time to deploy,” he said.
Meanwhile, T-Mobile is using dual-mode radios in the 2.5 GHz and 600 MHz bands to support both LTE and 5G, and PCS spectrum is being transitioned from the Sprint network to the new T-Mobile LTE network.
Also bringing synergies is T-Mobile’s decommissioning of 35,000 macro sites, which the company expects to complete by the end of 2022. On the way to that goal, the company expects to decommission 7,000 to 8000 sites by the end of 2021. This step in network integration is expected to deliver $3 billion of hard cost run-rate synergies by 2024.
Thousands of retained Sprints sites represent another source of synergies from the merger. T-Mobile is upgrading them with 5G-capable radios by the end of next year. The combined network also allows for 16,000 avoided macro sites and 50,000 avoided small cells, a factor expected to provide $2 billion of additional savings by 2025.
In the last year, T-Mobile has grown its 600 MHz 5G network to cover 287 million pops and more than 1.6 million square miles, with average speeds that are twice that of LTE. The carrier promotes its 600 MHz network under the name Extended Range to reflect the superior propagation characteristics of the 600 MHz frequency band. The network is expected to cover 300 million people by the end of this year and 97 percent of the population by the end of next year.
Ray said speeds averaging 300 megabits per second reached 106 million people at the end of 2020, a number that will grow to 125 million people by year-end 2021.
Ray noted that T-Mobile’s current speeds — 300 megabits per second on average with one gigabit peak — were generated using only 16 megahertz of the carrier’s average nationwide 160 megahertz of 2.5 GHz spectrum.
“We expect to increase the [average speed] by 80 to 100 megabits per second, over the course of this year, delivering an anticipated 400 megabits per second with higher speeds to come as we increase the greater-than 100 megahertz-wide channels upon the completion of our network integration,” he said.
T-Mobile will substantially complete its 5G network by the end of 2023, growing its current network of 70,000 macro sites up to 85,000 macrosites and 50,000 small cells. To reach to those numbers, T-Mobile is performing 1,000 radio upgrades every week.
“We’re putting our multi-layer spectrum portfolio to work to create the densest and broadest network to win the digital divide,” Ray said. “Our network enhancement is running at a truly unprecedented pace and efficiency, using a process that we have worked tirelessly to develop and execute, and we’re just hitting our stride.”
February 14, 2017 –
The bidding in the clock phase of the incentive auction concluded last Friday, totaling more than $19B for 84 megahertz of spectrum. Far lower than what was expected. BTW, my esteemed colleague Don Bishop predicted the total would be $19B in January’s AGL Magazine. See him for your Powerball numbers.
The Commission took the opportunity to thank staff for their hard work, express hope for the new spectrum use and to do a little Monday morning quarterbacking.
FCC Chairman Ajit Pai expressed hope that the frequencies freed up in the auction would prove beneficial to wireless coverage especially in rural areas. He stressed, however, that more work is needed to successfully complete the spectrum transfer.
“Delivering on the promise of this auction will require a smooth and orderly post-auction transition. That means we must ensure uninterrupted access to over-the-air television and a timely clearing of the new wireless band. We will devote a great deal of attention to those tasks over the coming months, and it will be a top priority of mine as Chairman of this agency,” Chairman Pai said in a prepared statement.
Commissioner Michael O’ Reilly was less sanguine about the auction, criticizing the previous administration’s decisions made in running the auction.
“While I am pleased that the forward auction has closed and we don’t have a failed auction on our hands, significant review is necessary to understand how the FCC rules and auction design impacted the results,” he said in a prepared statement. “Although Congress provided a strong statute to utilize market forces to ensure spectrum is put to its most efficient use, including for necessary wireless voice and data licenses, the previous majority’s implementation appears to have been based on some assumptions that were far off the mark.”
The auction will now proceed to the assignment phase where winners can bid for specific frequency blocks.