T-Mobile has yet to take possession of the 2.5 GHz spectrum that it acquired via auction in 2022 to fill holes in rural territories across the U.S., but it’s ready to roll when it does become available.
Congress passed legislation requiring the FCC to release the 2.5 GHz spectrum from Auction 108 and President Joe Biden signed the 5G Spectrum Authority Licensing Enforcement (SALE) Act into law in December. However, the process allowed for a 90-day window for the licenses to actually be distributed, so T-Mobile is still waiting.
T-Mobile President of Technology Ulf Ewaldsson said he and his team have every expectation that the allocation will get done within the 90-day timeframe, when they’ll finally be able to use the spectrum as it was intended.
And the icing on the cake? “We don’t need to invest one single dollar in equipment,” he told Fierce. It’s just a matter of changing some software on gear that’s already deployed.
Mid-band all the way
The remaining 2.5 GHz spectrum is in addition to the 2.5 GHz spectrum that T-Mobile gained control over when it acquired Sprint. That spectrum has existed for a long time, but it’s particularly valuable for 5G.
Interestingly, T-Mobile, through its predecessor VoiceStream Wireless, started out as a mid-band spectrum player with PCS. That 1900 MHz spectrum has now been converted to 5G, Ewaldsson said. He also touted the advantages of being on a mid-band spectrum grid from the beginning – and the value of 2.5 GHz in particular.
“I know my competitors are challenged because they’re up in the C-band, which is a 30 percent lower radius if you look at it from a coverage point of view,” he said.
That’s not all. T-Mobile has even more spectrum at its disposal. For example, T-Mobile’s AWS spectrum continues to support 4G LTE, and “we could potentially flip that over,” and that would require no capital investment, which “is very effective for us,” he said.
T-Mobile also bought 3.45 GHz spectrum licenses, which would require capital, but it could be deployed with C-band for a more effective rollout, he said. T-Mobile didn’t spend nearly as much as its rivals Verizon and AT&T on C-band spectrum. However, it’s looking at “some specific deployments” of C-band this year, possibly in areas where its needs a capacity boost, he said.
All told: “We’ve got so much more room to run on our spectrum portfolio,” Ewaldsson said.
Small towns & rural areas
T-Mobile spent about $304 million in Auction 108, which was largely seen as an opportunity for T-Mobile to fill in the “Swiss cheese” holes in its 2.5 GHz portfolio, especially in rural areas.
Even without that spectrum, it’s boasting great strides in coverage in small towns and rural areas.
One example is West Virginia, which traditionally has ranked near the bottom of studies comparing access to high-speed broadband and mobile services. T-Mobile recently held a press event with West Virginia Governor Jim Justice to highlight the impact of T-Mobile’s $200 million investment in the Mountain State.
Make no mistake. T-Mobile isn’t making these kinds of investments out of the goodness of its heart. Its merger with Sprint in 2020 requires T-Mobile make significant investments to improve internet and mobile service in rural and small-town America. As part of that promise, T-Mobile spent that $200 million on 377 new towers and upgrades to 121 existing towers in West Virginia.
Still, there’s a reason small towns and rural areas typically are the last to see the latest and greatest in wireless network upgrades. In terms of cell sites, it requires about three times the effort to reach a population of 300 million compared to 100 million.
“We were very happy when we passed one of our super big milestones by Q3 of last year, which was 300 million POPs built out on mid-band,” Ewaldsson said.
During T-Mobile’s Analyst Day in 2021, the company had about 13% share of households in small markets/rural America, with a goal of reaching 20% by the end of 2025. As of Q4 2023, that has grown to about 17.5%. It’s now the biggest household share taker compared to other U.S. service providers in smaller markets/rural America, he said.
Part of that is the ability to offer fixed wireless access (FWA), which is used to deliver high-speed internet to homes. That’s been the holy grail for decades in U.S. wireless industry, and “we broke it,” well on its way to its goal of serving 7 million to 8 million customers before the end of 2025, he said.
Where to next? Ask AI
T-Mobile launched 5G at 600 MHz nationwide before it took possession of the 2.5 GHz spectrum that Sprint brought to the table. It now boasts having 98% of the U.S. covered with 5G.
What’s next is focusing on building where it really counts, he said. “We call it customer-driven coverage,” he said. “We’re using AI and tons of data to figure out where the capital is going to go.”
Of course, when it comes to rural areas, the question arises: How rural are these areas? Some towns are remote, but there are vast areas of the U.S. where there’s a mile between homes.
“It has to make some economic sense,” he said. “We have a very sophisticated algorithm and built a model around how we decide where to put our capital investments” in smaller markets and rural America. “We’re also coordinated very carefully with store openings. There’s got to be distribution. It’s not only the network.”
They also look at the commerce that exists in a town. For example, there might be a factory that employs a lot of people or a food processing plant that processes the food that’s grown in that region. “We count that in too,” he said.
Network slicing & net neutrality trap
Predictably, wireless carriers don’t want network slicing – a long time coming and long revered as one of the best revenue-generating opportunities for 5G – to get mired in the wars over net neutrality.
Last fall, Ewaldsson warned that it’s very important the industry help regulators understand that network slicing is not about net neutrality. Since then, T-Mobile and others, including CTIA, have submitted filings telling the FCC to reject the idea that network slicing is inherently comparable to paid prioritization.
Ewaldsson acknowledged the debate quickly becomes polarized. He was part of the early discussions about network slicing at Ericsson when it was just a concept among engineers in a meeting room. They came up with the idea of calling it “slicing.”
Network slicing is often misunderstood, he said. It’s more about looking at the particular performance of a specific task and managing that outcome for the optimal user experience. But it’s not an easy concept to sell.
“It’s actually a user-benefiting technology. This is many times misunderstood” because people think it’s priority based. “No, it’s not. It’s about that particular experience that you have,” he said.
“Network slicing has nothing to do with the net neutrality priority discussion,” he added. It was created originally “to make sure that everybody can get the best possible experience depending on exactly what they’re doing.”
That topic isn’t going away anytime soon. For the immediate future, T-Mobile’s motivation is to please the masses.
“T-Mobile’s only interest is to satisfy customers. If we don’t, they will leave,” he said. “The industry and ourselves are laser-focused on churn, so why wouldn’t we optimize the customer experience in the best way?”