T-Mobile's Ray knocks RootMetrics report, lays out LTE vision
T-Mobile US (NYSE:TMUS) CTO Neville Ray pushed back hard against a recent report from network testing firm RootMetrics that placed T-Mobile last in overall network performance and reliability and third in speed.
Speaking at the Morgan Stanley Technology, Media & Telecom Conference on Wednesday, Ray said T-Mobile uses crowd-sourced network testing data from firms such as Speedtest.net by Ookla. "T-Mobile is the clear leader and has been for several months in terms of that performance," Ray said. He also said the RootMetrics data is "kind of old news" and that "some of the data is actually seven or eight months old."
Verizon Wireless (NYSE:VZ) topped the overall rankings for network performance, according to the report from RootMetrics, outpacing rival AT&T Mobility (NYSE:T). RootMetrics said it conducted tests in all 50 states, driving nearly 220,000 miles, visiting 6,300 indoor locations, and collecting more than 4.6 million test samples. The tests were conducted in the second half of 2013.
Ray said RootMetrics' study is "funded pretty much by the wireless carriers" and noted that the report came as a surprise to T-Mobile but not to Verizon. "Read into that what you want," he said.
However, Ray acknowledged that T-Mobile has LTE coverage gaps in suburban and rural markets, as highlighted by the RootMetrics report, though Ray said T-Mobile is working to fix the situation. "When we move out into rural areas where we don't serve, obviously we don't have a competitive experience," he added. "But we are working on that. We will be working on that more with what we do with our [700 MHz] A Block deployment. And we look to level the playing field across a broader swath of geography across the coming years."
T-Mobile CEO John Legere, who was not at the conference with Ray, took to Twitter to knock the RootMetrics report. "We've said it before, but I'm happy to say it again. We look at REAL results from REAL people when we make network claims. #uncarrier," he wrote.
At the conference, Ray said that T-Mobile's LTE network, which now covers 209 million POPs, will grow to 230 million covered POPs by mid-year and 250 million POPs by year-end. He said T-Mobile will expand coverage using AWS spectrum and not the 700 MHz A Block spectrum T-Mobile is buying from Verizon. Using that spectrum, T-Mobile could expand LTE coverage beyond 250 million POPs in 2015, Ray said.
Verizon currently covers 305 million POPs with LTE and has begun augmenting its capacity using AWS spectrum. AT&T covers more than 280 million POPs and will complete its LTE network buildout by mid-year. Sprint covers 200 million POPs and aims to hit 250 million POPs with LTE by mid-year.
Ray said that in most markets where T-Mobile has 10x10 MHz LTE deployments, it is delivering average downlink speeds of 15-17 Mbps. In markets where it will deploy 20x20 MHz LTE, as it has done already in Dallas, it is delivering average downlink speeds of 25-30 Mbps, he said. T-Mobile now has LTE service in 94 of the top 100 markets and 10x010 MHz LTE in 40 of the top 50 markets, and plans to eventually cover 90 percent of the top 25 markets with 20x20 MHz LTE.
Ray said he expects the A Block deal to close during the second quarter and T-Mobile aims to light up cell sites and support devices on the band by year-end. Combined with its existing Boston A Block holdings, T-Mobile has said the deal will give it low-band spectrum covering approximately 158 million POPs, including in Atlanta, Dallas, Detroit, Houston, Los Angeles, New York City, Philadelphia and Washington, D.C. T-Mobile said the low-band spectrum covers 70 percent of its existing customer base.
When asked about recent discussions about 5G network technology at the Mobile World Congress trade show in Barcelona, Spain, Ray said there is "a lot of uncertainty" but that there is still plenty of room for LTE to develop. He said "LTE Advanced is just around the corner" and that while other carriers are very focused on using carrier aggregation to enhance network capacity and speeds, that tool will be less important for T-Mobile because of its contiguous spectrum position in the AWS band. Yet he said "other features" of LTE Advanced will "start to come to life" in 2015 and 2016. "The factory that we built is an LTE factory," he said.
"I think the 5G conversation that occurred in Barcelona is cognizant of the fact that, as an industry, we need to start gathering our thoughts and trying to align those so we don't end up with a huge fragmentation on solutions," Ray said.
Ray also appeared at the conference with T-Mobile CFO Braxton Carter, who said that the transition of MetroPCS customers to T-Mobile's network is going better than expected. He said that around 40 percent of MetroPCS customers are now using T-Mobile's GSM/HSPA+/LTE network, and that by the end of the year 80 percent of MetroPCS customers will be on T-Mobile network. T-Mobile has said that it will shut down MetroPCS' legacy CDMA networks in Boston, Las Vegas and Philadelphia by the end of this year, a year earlier than expected. Carter said that the CDMA shutdowns will happen on a market-by-market basis, and that the shutdown of MetroPCS' CDMA network will result in an additional $1 billion in annual cash flows for T-Mobile.
Meanwhile, addressing the speculation that Sprint parent SoftBank wants to combine Sprint with T-Mobile, Carter reiterated that in the long term wireless consolidation in the U.S. is inevitable. However, he said T-Mobile is growing and innovating. "We're running the business for the long term," he said.
Deutsche Telekom CEO Timotheus Hoettges said that T-Mobile will continue to run as a standalone business--for now. "We have a standalone position which is good and which we're building out," Hoettges said at an earnings press conference in Bonn, according to Bloomberg. "You can't build your planning on a potential transaction. It's really difficult to judge." DT still owns 67 percent of T-Mobile.
"All our actions in the U.S. are to add value. At the moment we have no difficulties to run T-Mobile US on a standalone basis," he said, according to Reuters. "If a consolidation in the US mobile market will take place, we will enter that phase with an open mind," he added.
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