T-Mobile's Carter: Data traffic forcing Verizon to hastily move to 5G
Verizon's (NYSE: VZ) eagerness to deploy 5G is likely because the carrier is struggling to meet ever-increasing data traffic on its network, T-Mobile (NYSE:TMUS) CFO Braxton Carter speculated Monday. And its haste could be costly in the long term, he warned.
Carter told attendees at an investor conference that T-Mobile is already holding trials of components of 5G, just as AT&T and Verizon are. But he questioned the wisdom of Verizon's willingness to deploy 5G services even before standards are developed for next-generation mobile technologies.
Verizon has vowed to be the first U.S. operator to roll out 5G services, adding that deployments could begin as early as next year. T-Mobile executives last month took issue with such claims, with CTO Neville Ray saying such claims are "kind of BS, to be honest."
"When we were making our comments (about moving forward with 5G), we were talking about when the standards are fully developed and there's standardized 5G in the marketplace, which is really going to be a 2019, 2020 story," Carter said this week. "How Verizon is accomplishing that is with a non-standard implementation of 5G…. what you end up with is increased cost of going down a non-standard implementation because it's being developed only for you, and you don't get that global leverage of a standard implementation."
The emergence of 5G could be similar to the transition to 3G, Carter continued, which saw most carriers worldwide adopt GSM while a handful of others deployed CDMA, which was more expensive. And Verizon also risks having to replace its 5G infrastructure if standards are developed that aren't compliant with its network.
"The other issue is if you do a non-standard implementation and you want to pivot to a standard implementation, you're going to do a rip-out and replacement of that additional technology," he said. "You have to ask yourself, 'Why are you pushing so quick that it's going to end up costing you much more in the long run?'
"And I think the answer is Verizon continues to see massive increases in data consumption on their network, primarily driven by video. And it's something you have to do…. There's truth in what everybody is saying (about the transition to 5G), but that's my view."
Verizon representatives were not immediately available for comment.
Carter also touted the carrier's success with the prepaid MetroPCS business. T-Mobile closed on its merger with MetroPCS in May 2013, when the new company began trading on the New York Stock Exchange under the symbol TMUS.
"In our legacy markets, we've put out over a million net additions since the formation of TMUS in markets where before the model there was a general assumption you were actually at saturation," he said. "We've more than doubled our footprint of MetroPCS, and we've reached critical mass with that where we're seeing very significant penetration inroads as we've continued to edge that brand out."
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