T-Mobile execs call Verizon's 5G claims 'BS'

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T-Mobile (NYSE:TMUS) executives said Verizon's recent claims over its ability to deploy 5G services are -- ahem -- baloney.

"We're starting to see a lot of news starting to form in and around the 5G space," T-Mobile CTO Neville Ray said during a conference call to discuss the carrier's quarterly earnings. "I think folks have seen some of the earlier announcements, and you know, Verizon (NYSE: VZ) trying to move and saying they're going to be the first to 5G, well, it's kind of BS, to be honest."

Indeed, Verizon CFO Fran Shammo said last month that the nation's largest carrier would be "the first company to roll out 5G in the United States, and we are currently preparing for those field trials." Shammo also urged the FCC to move quickly to adopt rules that he said would help carriers expedite the deployment of next-generation networks.

Ray said T-Mobile and other carriers will begin to trial 5G services this year, underscoring the fact that AT&T (NYSE: T) recently asked the FCC for a three-year experimental license to test such services in Austin, Texas, later this year. But such offerings are years from coming to market in any traditional consumer use case, Ray said, adding that "when you talk about the consumer benefit, when you talk about 5G and the smartphone, you're talking about a 2020 story."

T-Mobile CEO John Legere went a step further, suggesting that Verizon is looking to next-generation technologies because the 4G networks of its competitors have generally closed the gap in terms of coverage and performance. Legere pointed to reported comments from Verizon CEO Lowell McAdam on Jim Cramer's Mad Money indicating wireless consumers may see their speeds increase by a factor of 50 thanks to 5G

"That's pure h****s***; it's not going to happen," Legere said on the call. "Either (McAdam) doesn't know, or what they're attempting to do is what they've done before several times, to connect the current (capabilities) to a long-term strategy for 5G, but call it 5G way before the standards or the handset capabilities are available."

Verizon fired back in a prepared statement, saying, "Today the discount carrier announced they spent less than $5 billion improving their wireless network last year, while we invested $11.7 billion in our wireless network in 2015. You can choose the discount carrier's LTE footprint which covers just 1.3 million square miles -- or you can actually travel far and wide and be connected, because Verizon's LTE network covers 2,385,306 million square miles."

Meanwhile, T-Mobile COO Mike Sievert insisted T-Mobile has an edge in the machine-to-machine market, partly because the carrier has vowed to maintain its GSM network until at least 2020. "This is really important because there's a big legacy base out there, whether it's alarm systems, all kinds of applications that are already on the GSM base, and we're the only carrier committing to have GSM in place through 2020, which is a huge strength. The other thing we're doing is working very closely with our partners to transition to LTE, and we're seeing the costs of modules coming way down."

Ray agreed, noting that only 5 percent of T-Mobile's voice traffic is routed over the GSM network.

"And so back to the top of the discussion on capacity and growth," Ray said, "we're driving extremely hard into LTE for our voice experience And what we're doing with GSM is as customers migrate away from 2G voice experiences, we're now able to commit this greater volume of spectrum to LTE, and at the same time really thin out the GSM layer. And you've seen some of our competitors abandon GSM in a huge rush because they haven't figured out how to carry great services like many of the M2M services on a GSM layer."

AT&T has said it will shutter its GSM network next year.

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