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T-Mobile leads Verizon and AT&T in 5G rollout

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T-Mobile US will lead its rivals Verizon and AT&T in the deployment of 5G networks throughout the United States during this year and foreseeably in the next two, thanks to the greater amount of spectrum and population covered that it has in the middle band. 2.5 GHz. Verizon and AT&T have bought much more spectrum than T-Mobile US in the C-band auction, but it won’t be enough to make up for the extensive coverage T-Mobile already had in the United States. In addition, the auctioned C band will not be available to operators until the end of the year, and partially.

 

Mike Sievert, CEO of T-Mobile US, a US operator majority owned by Germany’s Deutsche Telekom, was exultant three weeks ago at the meeting of financial analysts when assessing the competitive position of his company in the US 5G network market versus rivals Verizon and AT&T. He also welcomed what his company had achieved in the auction of 280 MHz of the C band, located between 3.7 and 3.98 GHz, which was awarded for a total of 95,119 million dollars, including the 13,950 million that The licensees must contribute proportionally to meet the costs of relocation of the frequencies until now occupied by the satellites that provide television services, among others.

 

The operator Verizon was the one that bid the most in the auction held between the end of last December and the beginning of January, although the results were not made public until the end of February. Verizon promised to pay 45,455 million dollars for 161 MHz, plus 7,909 million for the relocation of the frequencies now occupied. AT&T bid for 80 MHz, giving it a total commitment of $ 27.695 million. The third major operator, T-Mobile, was left with 27 MHz, with a total amount of 10,666 million dollars, as indicated in the following table compiled by the New Street Research consultancy.

The total amount of the auction, 95,119 million dollars, is certainly very high, although it must be taken into account that a total of 5,684 licenses were auctioned, each one occupying a relatively small part of the United States, some with a lot of population and others with considerably less, despite the fact that the total spectrum, 280 MHz, is reduced. Thus, the average megahertz per capita is $ 1.11, a reasonable amount, including relocation costs, but the total amount is colossal.

T-Mobile will offer a good 5G service in the coming years, with fully 5G networks, and great territorial coverage, although the speed that will be achieved is low, around 50 megabits per second

Verizon was the one that acquired the most licenses, a total of 3,511, representing 161 megahertz. AT&T was left with 1,621 licenses with 80 MHz, while T-Mobile obtained 142 licenses and 27 MHz. However, the 142 licenses of T-Mobile cover a territory of 207 million inhabitants and almost 68% of contiguous territory. T-Mobile selected only the licenses that interested it to complete much of the territory that it still had to cover, because the bulk of the cities already had them served with the 2.5 GHz band that it had thanks to the acquisition of Sprint.

 

On the other hand, Verizon and AT&T, as they had few licenses in the middle band from the outset, had to bid mostly for the smaller but more expensive populated areas. The increased need for spectrum from Verizon and AT&T also caused the bidding to skyrocket between the two for the most desired licenses, because T-Mobile had less stake in the auction than the other two large operators and selected very well where to go. Hence the disparity between the number of licenses obtained and the price committed by each of the bidders (Verizon came as Cellco Partnership), as seen in the following table from the FCC, the telecommunications regulator in the United States and organizer of the auction.

When assessing the current situation of the deployment of 5G networks in the United States, Mike Sievert highlighted that “T-Mobile now covers 287 million people with its Extended Range 5G network and 125 million with Ultra Capacity 5G” to add with some sarcasm that ” we are in a position to cover an additional 200 million people across the United States with Ultra Capacity 5G this year, even before our competitors even have the ability to roll out the 5G network in the mid-band. ”

T-Mobile customers, “auction winners”

“T-Mobile customers are clearly the winners of this C-band auction,” Sievert added. “Our 5G network, which is already a leader in the industry, has allowed us to be highly selective and strategic, concentrating our bets on the main markets in the United States.” As we had anticipated last fall, “the other guys [Verizon and AT&T] spent an incredible amount, because they had to do it; and even so, the truth is that the C band works much better in urban areas because it does not propagate as well as in the middle bands [2.5 GHz] that T-Mobile has in large numbers.

 

“Simply put, Verizon and AT&T bet on the wrong horse (when they deployed millimeter waves) and now they have had to back down and pay large sums of money to try to catch us,” added Neville Ray, chief technology officer at T-Mobile. . “There is only one true 5G leader in the United States, which is T-Mobile: all of America wins with better connectivity, more competition and a value that we are in a position to bring to consumers and businesses, forcing the other kids to do their best. for their clients as we have always done ”.

 

While the high-sounding words of T-Mobile’s top executives are true, the reality is that Verizon and AT&T have been forced by circumstances, basically due to the chronic shortage of spectrum available in the coveted 2.5 middle band. at 4 GHz, in the United States. T-Mobile played its cards well and succeeded in getting the previous FCC president, Ajit Pai, to approve the merger between T-Mobile and Sprint a year ago to form a single operator, despite opposition from the head of antitrust legislation and of the army of lawyers who had hired AT&T and Verizon to abort the merger.

Those responsible for AT&T and Verizon, of course, justified their position in the C-band auction in the meetings they held with financial analysts as T-Mobile had done. With the licenses obtained with the auction, the two rival operators of T-Mobile will be able to offer a very competitive 5G service to consumers and companies, especially in the centers with the largest population, as of 2023. The debt incurred, of more than 50,000 million dollars, and more than half in the case of AT&T, will be a burden for both operators, because more than 10 billion dollars each will have to be added to build the network with the licenses acquired.

 

In the case of T-Mobile, the numbers will also cost to square. The purchase of Sprint’s assets by the parent company, Deutsche Telekom, involved a large investment, such as the construction of the 5G network in the last year and the following years, as well as the provision of broadband services at a subsidized price that the company operator promised to offer to many sparsely populated nuclei for several years, to achieve approval of the merger. It also pledged not to install any Huawei network equipment in the United States.

 

In any case, the indisputable thing is that T-Mobile is in a position to offer a good quality 5G service in the coming years, starting now, and with fully 5G networks, with the SA 5G standard. The speed that will be achieved, however, leaves something to be desired, around 45 megabits per second. But, at least, the coverage will be broad, according to the experts who follow the plans of the three operators.


Source: T-Mobile. March 2021 (Analyst Day – virtual)

The top graph shows, on the left, the amount of spectrum that the three major US carriers currently have in the mid-band, basically 2.5 GHz, and on the right what they are expected to have from 2024, when licenses now auctioned are fully available for use. TDD (Time Division Duplex) is a system where access and terminals work at the same frequency but not at the same time, while with FDD (Frequency Division Duplex) there is a frequency and temporary space reserved, which in principle is more suitable for systems mobile phones and MIMO capability.

 

As seen in the graph, T-Mobile now has more spectrum than AT&T and Verizon combined, but within three years Verizon’s situation will be more similar to that of T-Mobile, with much greater penetration and speed in large urban centers due to part of Verizon. This situation may change shortly, because the current acting president of the FCC, Jessica Rosenworcel, is considering reallocating 100 MHz for flexible use in the band between 3.45 and 3.55 GHz, contiguous to the CBRS citizen band. , and also that between 2.9 and 3.0 GHz, as well as that between 3.3 and 3.5 GHz. The one used by the Department of Defense between 3.45 and 3.55 GHz is also under study, although some of these auctions would not start, in any case, until next year.

Advantages and disadvantages of 2.5 GHz vs 3.5 GHz

As is common in telecommunications, and especially in radio waves, each band has its advantages and disadvantages. T-Mobile takes the water to its mill and in the graph below it argues that the 2.5 GHz band has advantages over the C band, located between 3.7 and 3.98 GHz, because the signal reaches further. C band requires one and a half times more antennas than 2.5 GHz and twice as many antennas as AWS / PCS.

 

The C band, as seen in the graph below, covers 65% compared to 100% of the 2.5 GHz band. The use of signals at 600 MHz, 2.5 GHz and 3.7 to 3, 98 GHz allows T-Mobile greater flexibility and use innovations such as 5G channel aggregation and true 5G with SA-5G. Until next year, at least, neither Verizon nor AT&T will use SA-5G. In densely populated and user-dense areas, C-band offers greater advantages, both in terms of capacity and speed, just like millimeter waves. The problem with the latter, however, is that their scope is very limited.


Verizon invested more than $ 45 billion in spectrum purchases during the recently held C-band auction, but it won’t be partially available until later this year. AT & T’s bid for more spectrum was more moderate, but it will also weigh heavily on the company’s debt.

Verizon and AT&T will have to wait at least a year to have a high-level 5G service, especially in large cities, but they will have to face the onerous debt incurred with the purchase of the C-band spectrum

In a study carried out by OpenSignal last February, the experience of users of 5G networks in the United States is relatively similar in the three operators where there is coverage, with download speeds between 41 and 48 megabits per second, with a slight advantage from T-Mobile. In upload speed, the pattern of downloading data is repeated, but the speed is much lower, ranging from 5.6 megabits per second to T-Mobile’s 11.4 megabits per second, with Verizon in the middle. Verizon’s advantage over the rest of the operators is in the video experience, both in normal broadband and 5G.

For Eric Schmidt, the former CEO and president of Google, is highly critical of the results of the C-band auction in an article published in the Financial Times on February 21. In his view, investing in a powerful 5G network infrastructure should be a priority, both for the United States and its allies and, especially, to rival China, which is several steps ahead on this issue.

 

The sums paid in the auction will reduce, in his opinion, the financial capacity of the operators involved and will probably lead to a divestment and a reduction in their size, he notes in the opinion piece. The sum of 81,000 million dollars considers, on the other hand, that it is a minutia at the government level, less than a month of the payment of the country’s debt, which will probably not be reinvested in the sector.

 

According to his calculations, building a C-band mobile network covering 80% of the population of the United States would cost about $ 70 billion and would require a million radio stations. It would be a good base to face the next mobile generation, 6G, and face China. In his opinion, in the next auctions the obligation to build a powerful infrastructure should be prioritized by the operators who want to compete, rather than having a collection effort.