T-Mobile on Wednesday turned on 2.5 GHz spectrum for 5G in almost 200 new locations, as the operator works towards its target of covering 100 million people with mid-band 5G before year’s end.
T-Mobile currently has 319-megahertz of low- and mid-band spectrum nationwide, which it likes to boast is more than twice that of AT&T or Verizon.
T-Mobile has a major head-start over competitors in terms of mid-band thanks to its merger with Sprint, but operators will have the chance to bid for C-band spectrum between 3.7-3.98 GHz at the FCC auction set to start December 8.
Still, T-Mobile does not appear to be wasting time in its efforts to activate 2.5 GHz for 5G. The latest brings T-Mobile’s 2.5 GHz 5G tally to 408 cities and towns, up from 210 just last month.
Spectrum expert Brian Goemmer, president and founder of AllNet Insights & Analytics, a firm that specializes in U.S. spectrum ownership and analysis tools, thinks T-Mobile's window of opportunity to "essentially own the mid-band layer cake” for 5G is likely open until at least 18 months after the C-band auction.
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That timeframe is due in part to the time it will take to get equipment standardized, Goemmer said, as well as get the spectrum cleared and ready for use. C-band is currently being used by satellite operators that are repacking to clear the band, with the lower 280-megahertz allocated for 5G.
During the CTIA Summit at GSMA’s Thrive North America event on Wednesday, Nokia CTO for North America Mike Murphy discussed a similar timeline for putting C-band to use.
“Even though the auctions are at the end of this year, the first 100-megahertz tranche really only becomes available in December of 2021, meaning service in 2022,” Murphy said during the virtual event. The next 180-megahertz tranche will be cleared by December 2023, meaning service in 2024.
“The timing and amount of spectrum is really important in this case,” he added. Murphy highlighted a study showing continued growing traffic demand is estimated to exhaust available LTE capacity at some point between 2022 and 2023, making C-band and mid-band in general all the more critical.
“While the 280-megahertz over the next four years is great, we still need more [mid-band], and ideally we need it earlier,” Murphy said.
'Easy wins' for T-Mobile 2.5 GHz expansion
The timeframe before competitors like AT&T and Verizon can get meaningful amounts of mid-band is not insignificant, and T-Mobile right now has the advantage of its deep 2.5 GHz holdings that provide a “sweet spot” in terms of capacity and coverage.
The frequencies are a differentiator from the low-band 5G rollouts by all three major operators (T-Mobile included) that have shown performance more similar to LTE, and more widely available than millimeter wave spectrum Verizon has largely focused on that delivers super-fast speeds but is severely limited in coverage.
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T-Mobile expects to have nationwide mid-band 5G by the end of 2021, said T-Mobile President of Technology Neville Ray, speaking Wednesday at the CTIA and GSMA event. Where mid-band is deployed, he said customers are seeing 7.5-times faster speeds than LTE, with average speeds of 300-400 Mbps and peak speeds above 1 Gbps.
In Wednesday's 2.5 GHz expansion, T-Mobile listed 198 new locations across 27 states.
As for where T-Mobile opts to activate 2.5 GHz for 5G first, Goemmer said that time-wise, “the easy win for T-Mobile is expanding 5G into markets where Sprint already had 2.5 GHz launched for LTE.”
Following that route, he believes it would be relatively easy for T-Mobile to reach 200-225 million people covered with 2.5 GHz for 5G (citing the population figure where advertisers allow the claim of "nationwide" coverage).
It's a longer timeline for T-Mobile to overlay 2.5 GHz onto all of the sites where Sprint hadn’t done so for LTE, he said, pointing to the need for permits and zoning for new site builds, and filing for new antennas.
As for T-Mobile’s latest 2.5 GHz additions, Illinois, New Jersey and Pennsylvania are among states with largest number of towns upgraded this time around, and seven states are seeing their first 2.5 GHz locations from T-Mobile.
That includes Overland Park in Kansas – the home of former Sprint headquarters. Kansas also saw T-Mobile turn on mid-band 5G in Pittsburg and Wichita. The full list of new locations is here.
“With our new multi-year agreement with American Tower we can accelerate our 5G build even more aggressively," Ray said during Wednesday's virtual event.
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However, the recent 15-year Master Lease Agreement (MLA) may not be as big a boon for American Tower as expected, according to Wall Street firm MoffettNathanson.
American Tower reported third quarter financial results Thursday and MoffettNathanson analyst Nick Del Deo, in a note to investors, wrote that the MLA with T-Mobile "appears to likely to deliver less revenue to American Tower than we had previously anticipated T-Mobile would ultimately pay, to the tune of ~10% when comparing run-rate revenue after the T-Mobile/Sprint network combination is completed," attributing churn as a large component.
CBRS could help Verizon ready for C-band
Another advantage is that T-Mobile already has a very mature upper midband spectrum network because of Sprint, Goemmer said, meaning a high density of active sites with those frequencies.
Verizon could help set itself up for faster C-band deployments down the line, by deploying CBRS spectrum widely across sites ahead of time, he suggested.
Verizon was the biggest spender at the recent auction for Priority Access Licenses (PALs) in the Citizens Broadband Radio Service (CBRS) 3.5 GHz band. The carrier could create a densified upper mid-band spectrum network, aka a lot of towers active with CBRS, and then overlay with C-band radios 18 months after the auction.
Goemmer thinks that will be the key to Verizon’s success. “To just go crazy deploying sites for CBRS, realizing that it shortens the deployment timeframe for [C-band].”
“It’s a way for [Verizon] to get a mature tower network there ready for the upper mid-band spectrum they have with CBRS, but that is going to be much more valuable when they get C-band spectrum,” Goemmer said.
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That said, when it comes to competing with T-Mobile on mid-band, Sprint's 2.5 GHz still gives it an edge in CBRS markets.
“The advantage T-Mobile has right now is that the places where Verizon bought CBRS, T-Mobile already has a mature 2.5 GHz network because of Sprint, so they’re not having to increase the tower density,” he noted. Verizon, however, needs to increase the active site density Goemmer said, so that the 3.5 GHz spectrum can fully cover all of the square miles of those markets.
“The other reality for Verizon is they only have the most densely populated counties with CBRS spectrum,” he noted, so the carrier won't be able to make a nationwide mid-band coverage claim on CBRS alone.
Verizon hasn’t stated plans to use CBRS for nationwide 5G coverage, and the band has some limitations in terms of the shared nature, channel sizes, and power restrictions.
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According to AllNet Insights data, Verizon’s CBRS PALs cover 153 million PoPs (points of presence), accounting for 46.3% of the population.
By using the same 200 million PoP definition for “nationwide coverage,” Verizon won’t be able to claim nationwide upper mid-band 5G until it deploys C-band, Goemmer noted.
Of course, the C-band auction has yet to start, and while AT&T, T-Mobile and Verizon have all registered to participate, it remains to be seen who will ultimately come away with what.