Marek’s Take: Looking back at 2019—the good, the bad and the ugly

2019 was a tumultuous year for many wireless firms. Nearly 20 months after announcing its intent to purchase Sprint, T-Mobile still hasn’t closed the deal and is now in court battling to keep the acquisition on track. AT&T struggled with an activist investor resulting in the company agreeing to sell $10 billion in non-core assets. And Verizon is pushing to deploy 5G in 30 markets nationwide despite the fact that it reduced its employee headcount by 17,000 in the past year.

I looked back on some of 2019’s developments and decided to categorize them in three ways— the good, the bad and the ugly. Here’s my list:  

Good—2019 was the year that 5G became a reality
After spending at least four years talking about the wonders of 5G and how it will dramatically alter society, 2019 was the year to give the world a hint at what 5G can do. All four Tier 1 operators launched mobile 5G services in 2019. In addition, there are now more than handful of 5G smartphones including the Samsung 5G Galaxy Fold and the OneTouch 7T Pro 5G McLaren Edition (which gets the award for the longest and most awkward smartphone name ever).

Good—Operators resolve to end robocalling

Operators band together to stop robocalling. The problem may not be solved yet, but at least there’s an effort underway to put an end to robocalls. In August a group of 12 major telecom companies including AT&T, Sprint, T-Mobile and Verizon signed a pledge along with attorneys general from all 50 states and the District of Columbia to adopt principles aimed at combating robocalls. Unfortunately, the pledge did not include a timeline for resolving the issue but at least there’s now a concerted effort to try.

Good—New eSIM process will benefit consumers
The GSMA will revamp the eSIM process and make it easier for consumers to switch operators. This recent development may not make wireless operators happy but it is definitely a win for the consumer. In early December the Department of Justice's Antitrust Division said it would drop its anti-collusion investigation of the GSMA and its mobile operator members after the GSMA agreed to develop a new remote SIM provisioning procedure that would include input from non-operator members, such a device makers, and make it harder for operators to use the eSIM process as a way to avoid competition.

Bad—5G hype will lead to unrealistic expectations

As wonderful as it is to have 5G services available in some markets in the U.S., the wireless industry hasn’t done itself any favors by hyping the expectations around 5G up so much they are nearly impossible to meet. We’ve heard it all: 5G will make everything from augmented reality games to autonomous cars and remote surgery possible. And while these types of services may become a reality eventually, they won’t happen right away. The industry needs to set realistic expectations so that consumers aren’t disappointed after spending a minimum of $1,000 on a 5G smartphone.

Bad—U.S. will need more mid-band spectrum for 5G
While I commend the FCC for conducting the current mmWave spectrum auction, which has so far generated $5.7 billion in 26 rounds of bidding, that auction is still not enough to satisfy the needs of U.S. operators like Verizon and AT&T. Both operators will likely need more mid-band spectrum if they want to deploy 5G more widely across their footprints. The FCC has proposed to auction the licensed portion (70 MHz) of the 3.5 GHz Citizens Broadband Radio Services (CBRS) band in June 2020. However, that probably isn’t enough to solve the problem. The FCC needs to make more mid-band spectrum available quickly if it wants 5G to reach beyond just the urban corridors and if it wants the U.S. to keep up with the rest of the world.

The Ugly—How will the Sprint/T-Mobile saga end?
There has been two weeks of testimony so far in the District Court case involving 14 state attorneys general that have sued to stop the merger of T-Mobile and Sprint. During the trial we have learned more about Dish’s 5G plans (10,000 5G sites by the end of 2022) and heard some enticing tidbits about its mysterious strategic partner. But we still have no idea how this saga will end.

There’s been a lot of speculation on the outcome from the financial community. Just prior to the trial’s start, Raymond James lowered its odds of the deal getting approved from 85% to 55%.  Analyst Ric Prentiss said the firm expected more state AGs to reach settlements with T-Mobile and Sprint and drop out of the lawsuit. 

But after several days of testimony some were feeling more positive on the deal. Walt Piecyk, partner and TMT analyst at LightShed Partners, said in a Dec. 19 research note that his firm believes that the state AGs have failed to make a compelling enough case to cause the judge to overrule the DoJ and the FCC’s decisions to approve the deal.

With just nine days left in 2019 we may soon know if T-Mobile will finally be allowed to merge with Sprint. Should that occur 2019 may be known for more than just the year that 5G finally made its debut around the globe even though it is still far from being the revolutionary technology that was initially described.