T-Mobile has 'too many' small cells, Ray says

T-Mobile President of Technology Neville Ray reiterated the synergies it stands to gain due to its combination with Sprint, and that includes in the area of small cells.

“As we combine the two companies, both companies were building out small cells to supplement limited spectrum in certain areas, certain coverage hotspots and so on,” he said during a Wells Fargo event on Monday, according to a transcript provided by T-Mobile.

“And so we have – same as we do on the macro side right now, I have too many,” Ray said. “We’re in the 70,000-plus range on small cells. Some of them, not a huge volume, but some of them are in areas where clearly now either T-Mobile or Sprint has a tower base that makes the requirement for the small cell go away because of that macro strength and capacity I talked about.”

Indeed, Ray has emphasized the macro strength that T-Mobile enjoys and while small cells will be a “key part of the strategy,” it remains focused on whittling that number to 50,000, a number that Ray has cited in previous discussions.

“We’re not changing that number at all at this point in time,” he said. “I think as we see use cases and 5G traffic on these networks really start to grow and move and we fully understand the mobility patterns in many of these use cases that we can, if we’re honest with ourselves, define today, that obviously we’ll continue to review that math and those numbers. But right now, our plan is to again delivery synergies. This is a synergy-funded network upgrade program to deliver some synergies, small [as] they may be, in that small cell arena.”

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T-Mobile talked about decommissioning sites last year, something it started in 2020 but really expected to ramp up in 2021 – ahead of an earlier estimate of 2023 and 2024. At that time, Ray talked about decommissioning about 35,000 Sprint sites over the coming years, leaving 12,000 or 13,000 Sprint sites that it would bring into the T-Mobile fold for capacity and/or coverage.

Last week during a UBS conference, Ray also said the target is about 50,000 for the amount of small cells T-Mobile ultimately needs. His strategy is primarily a macro-based approach for 5G, so “we’re going to pour huge amounts of spectrum onto the largest and most dense wireless network in the U.S. I mean nobody can dispute we have the biggest network – I mean that’s like barking at the moon. We’re well over 110,000 sites today.”

Verizon’s small cell strategy differs from T-Mobile’s. Verizon plans to continue adding around 14,000 small cells for the next few years to build up coverage and eventually expects mmWave to carry 50% of urban traffic. 

Verizon happens to control more millimeter wave (mmWave) licensed spectrum than its rivals, and it’s using that to pinpoint high-density areas like stadiums and arenas.

Ray reiterated that T-Mobile also is using mmWave and noted its work in New York, but it’s more selective in deploying mmWave in venues where it needs that kind of extra capacity. Its stockpile of spectrum is skewed to 2.5 GHz and other bands as opposed to mmWave.

Sprint brings AWS, PCS assets too

T-Mobile closed the Sprint transaction about 14 months ago and together, they have almost 300 megahertz of spectrum in the mid-band arena, Ray noted. That includes AWS and PCS assets; folks sometimes forget that Sprint has “great PCS assets,” as well as the 2.5 GHz that gets most of the attention. (Sprint’s service was known as “Sprint PCS” in one of its earlier iterations.)

After the T-Mobile/Sprint deal closed, for rivals AT&T and Verizon, they were “very conscious of the fact that probably for the first time in both company’s history, they were looking at a competitive player in the marketplace that was better suited or better fit with spectrum assets than they were themselves,” he said.

The C-band auction was the largest one in U.S. history, and that’s where Verizon and AT&T obtained their hefty 5G mid-band plays, but that spectrum isn’t going to be available immediately. The first tranche becomes available late this year, and T-Mobile is taking advantage of a two-year head start of when the balance of that C-band spectrum becomes available.

T-Mobile also acquired C-band spectrum, spending more than $9 billion, and it plans to use that spectrum in denser parts of U.S. metro areas, acting as a “sublayer” of the spectrum cake, according to Ray. Right now, T-Mobile is delivering average speeds close to 350 Mbps using its 2.5 GHz mid-band layer.