Each week, Kara Swisher and Scott Galloway, hosts of the terrific Pivot podcast, end an episode with their list of "wins and fails." This feature inspired me to write a column on U.S. operator successes and failures in 2020, as a sort of retrospective on an incredibly unusual year. The industry deserves a lot of credit for navigating the challenges of Covid-19 while still making progress on key initiatives: getting the T-Mobile/Sprint deal done; completing several successful spectrum auctions; and rolling out 5G networks.
Before getting to an assessment of the individual operators, I’m going to give a category win to the major U.S. operators’ overall performance during the pandemic. Networks held up well in the midst of some significant traffic shifts. This was aided by a creative spectrum leasing regime, which demonstrated a remarkable level of cooperation and agility in response to a crisis. The operators should also be commended for having relatively few hiccups in their business, which is especially impressive given their size and employee count: network improvements and 5G deployments proceeded pretty much as planned and spectrum auctions proceeded. Operators also did an excellent job of keeping retail operations going during the pandemic, with improvements to the online/pickup experience and also safely keeping store doors open where and when they could.
And now, for individual operator wins and fails.
Verizon
Wins. Hans Vestberg and Verizon’s leadership team should be commended for re-focusing the company on the network business. This meant a big focus on 5G and IoT. Alongside this is a win on the spectrum side, with strong results in the CBRS PAL auction and what is likely to be success in the C-band auction. Those betting on Verizon have to take a longer-term view, however, since we won’t see the benefits of all this mid-band goodness for another couple of years.
Another expression of Verizon’s focus on the core was the acquisition of Tracfone, which I think is a good move. This was done as much for defensive as offensive reasons. But with T-Mobile having Metro, AT&T having Cricket, and Dish with Boost and also the likely host of other MVNO brands, Verizon needed to have a bigger presence in this space and also greater control of a company whose share of network traffic was already trending in Verizon’s direction.
Fails. I think Verizon’s biggest fail in 2020 is Verizon 5G Home, the company’s fixed wireless access (FWA) initiative. If you look at where it is at the end of 2020 compared to where it was a year ago, there are only a handful of new markets and only a modest expansion of coverage in existing markets. Verizon has said very little about how this business is doing. And, given the strong performance of cable’s broadband business this year, it doesn’t look like Verizon is making much of a dent.
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Mixed. I also have to give Verizon a combination win and fail with regard to 5G in 2020. On the one hand, Verizon has shown a continued commitment to mmWave, through auctions, achieving the targeted deployment of Ultra Wideband to 61 markets, and convincing Apple to support mmWave in the iPhone 12. On the other hand, Verizon needs to reposition mmWave from a marketing perspective. It’s suitable for FWA, select enterprise deployments, campuses, and high traffic/density areas, sort of a "super Wi-Fi hotspot."
I also give Verizon a win and a fail on its ‘nationwide’ 5G, which the company is achieving mainly through DSS. Verizon gets a win for meeting its objective of “launching nationwide 5G by the end of 2020” with the world’s largest DSS deployment to date. But DSS, as a bridge to mid-band circa 2023, is not delivering a particularly compelling 5G experience, at least in these early days. DSS as "nationwide 5G" is not as much of a miss as AT&T’s much-maligned 5G Evolution, but it’s in the same ballpark.
AT&T
Wins. I think AT&T’s biggest win in 2020 is its continued strength in the enterprise mobility market. AT&T has had some impressive wins in Private LTE and with FirstNet. AT&T is also well positioned in the enterprise 5G space as that market begins gaining steam in 2021. AT&T has also outperformed its rivals in IoT.
Fails. It looks like AT&T is ready to capitulate on DirecTV. Spurred by the friendlies at Elliott Management and the need to raise money to fund its C-band objectives, AT&T is well on the way to divesting that albatross. In the annals of bad acquisitions by telecom companies, it isn’t in the league of Sprint-Nextel…but it’s up there.
Mixed. AT&T did a nice job of recovering from the 5G Evolution misfire of 2019 by launching Nationwide 5G. AT&T’s sub-6 GHz version of 5G isn’t as good as T-Mobile’s 2.5 GHz markets. But it’s better, on balance, than Verizon’s DSS flavor of 5G. AT&T is able to leverage a broad and deep spectrum portfolio for its 5G service. On mmWave, AT&T continues to send mixed messages. On the one hand, AT&T acquired even more mmWave spectrum in 2020. On the other, it hasn’t put much of it to work.
I also give AT&T mixed reviews on Time Warner so far. The year’s big story there was HBO Max. The initial launch was not very successful, and the HBO Max app and UI are second rate. Also, even though the content library is broad and deep, I personally don’t like how the premium HBO original content is now hidden within, and diluted by, HBO Max. However, Jason Kilar gets credit for finally getting HBO Max on all platforms (Amazon and Roku being the last holdouts) and for the gutsy move to release all films simultaneously to streaming for 2021. Not a popular move among theater execs and film purists, but probably the right move, strategically, at this time.
T-Mobile
Wins. The obvious big win was the successful completion of the Sprint acquisition. I give credit to T-Mobile for the strong operational execution since the deal closed in April in terms of network integration, back office functions, and marketing message. The retail strategy seems a bit disjointed, but I give TMO a bit of a mulligan there due to the pandemic.
The other big win is spectrum, and specifically 2.5 GHz. If T-Mobile executes successfully, it has the opportunity to have the leading broad-based 5G network, at least for the next couple of years, while its competitors play catch-up on mid-band.
Fails. Sorry folks, but I’m not all that optimistic on the prospects for TVision. It’s not a bad service per se, but it’s entering a crowded market with little obvious differentiation. Perhaps with a combination FWA/TVision package, T-Mobile can disrupt the cable market, sort of the Metro/Cricket of the broadband/TV landscape, but the TAM isn’t really that big, and there isn’t all that much that can be done on price, given the complexities of rights/content deals.
Mixed/Needs Work. The enterprise space. T-Mobile is well positioned to be one of the Big Three in the consumer market. But much of the incremental opportunity this decade, especially with regards to 5G, is in the enterprise. New T-Mobile is starting very much behind the eight ball here. They’ve had a lot on their plate post- Sprint acquisition. But we need to see a clearer articulation of, and movement along, their enterprise strategy during 2021.
Cable Companies
Wins. After many fits and starts over the years, cable’s strategy in mobile started coming to fruition in 2020. Cable notched an outsized share of subscriber adds, ramped up the marketing, and won licenses in the CBRS PAL auction. Over the next year, I’m looking for them to diversify away from their dependence on Verizon and the not very favorable economic terms of that arrangement.
Cable’s broadband business was also a major winner during 2020, driven by the needs of households during the pandemic. They were also among the big winners in the RDOF auction. Even with FWA and other emerging options, it looks like their broadband position will remain strong for the foreseeable future.
Fails. Cable’s biggest challenge continues to be how to most successfully navigate the ever-changing Pay TV landscape. Fortunately, their broadband business is propping up subscriber losses and sagging margins in their core cable business.
Mixed. A big question mark going forward will be what cable does in mobile, particularly now that they own spectrum. With Dish entering the market and more spectrum capacity coming online industry-wide, cable will be in a position to get more favorable wholesale terms. However, ultimately, if they’re going to be players in 5G, they’ll need some sort of hybrid facilities-based/MVNO offering.
Mark Lowenstein, a leading industry analyst, consultant, and commentator, is managing director of Mobile Ecosystem. Click here to subscribe to his free Lens on Wireless monthly newsletter, or follow him on Twitter at @marklowenstein.
Industry Voices are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by FierceWireless staff. They do not represent the opinions of FierceWireless.