T-Mobile CTO: LTE will be the name of the game for the foreseeable future

T-Mobile 5G
LTE is the network technology for now but T-Mobile considers itself well positioned for 5G due to its spectrum holdings. (FierceWireless)

The wireless industry is going to compete on LTE well into the next decade, and T-Mobile is well-positioned in that space as well as the move into 5G, according to its CTO Neville Ray.

“If we think anything is happening from Verizon and AT&T in the 5G space in ‘18 or ‘19 is going to make one iota of difference in this industry, you’re all mistaken,” he said during the company’s earnings call with analysts. “I mean this industry is going to compete around LTE well into the next decade.”

LTE accounts for the majority of terminals and usage and that’s where it’s going to be for a material period of time. “We’re in this very, very strong position of strength. We’re the best performing LTE network in the nation,” and T-Mobile has been working through how to expand and deal with capacity and growth for some years now. “I’m very comfortable where we are.”

Ray noted that T-Mobile does have millimeter wave spectrum, including in key urban areas, and it will start to deploy that toward the end of this year, with smartphones due to come the first half of 2019. T-Mobile has great book ends, he said, with spectrum holdings at both the high and low bands with its bevy of 600 MHz that it acquired at auction last year and has already built out to a large degree.

“We’ve been very clear from the outset that we’ll launch 5G services in 2019” leveraging 600 MHz and it will do that when the software is available early in 2019 and when smartphones are available, which will be the first half of next year, he said.

He also said that it’s somewhat ironic that Verizon, supposedly the poster child for network performance and reliability, is pursuing fixed-access replacement in the “most unreliable fashion known to man,” using 28 GHz to offer coverage inside residences. As for AT&T, he said it finally joined the camp in terms of pursuing mobile 5G rather than fixed but that it’s just going to be offering a broadband puck for starters.

“Realistically, the race is on for mobile 5G. It’s going to hit the mobile space, it’s going to be there in the first half of ’19, and we’re going to be really busy and really relevant,” he said.

He didn't rule out the possibility that T-Mobile could introduce a product in the fixed wireless space, but mostly he characterized the millimeter wave space as fraught with challenges and said it’s extremely difficult to offer adequate indoor coverage from the outside using 28 GHz.

“We’re not taking one eye off the ball with what we’re doing on LTE … and we will not miss anything on the 5G front,” he said.

It doesn’t appear that 5G is going to have a huge impact on T-Mobile’s capex.

“We target cash capex of $4.9 to $5.3 billion, excluding capitalized interest. This includes expenditures for 5G deployments,” said CFO Braxton Carter, in prepared remarks.

That compares to cash purchases of property and equipment of $5.24 billion last year and $4.70 billion for 2016. The increase was due to growth in network build as it deployed 700 MHz and began to deploy 600 MHz.