T-Mobile eyes 30M to 40M new postpaid subs through retail expansion

Neville Ray
T-Mobile CTO Neville Ray

T-Mobile executives say deployment of its low-band spectrum and an ongoing buildout of its retail presence are key to maintaining the carrier’s momentum this year.

“Our LTE network at the end of the year covered 313 million people in the U.S.,” CTO Neville Ray said Wednesday at an investors conference.” “Underneath and a big part of that footprint is what we’ve been doing with low-band… (which is) now reaching 251 million customers in the U.S.”

And a top priority in the coming months is ramping up service in Chicago, Ray continued. T-Mobile last year paid $420 million for 12 MHz of 700 MHz A Block spectrum in the Windy City, far more than the $250 million to $300 million it was valued at by UBS. The deal will enable T-Mobile to offer its "Extended Range LTE" using 700 MHz spectrum in every one of the top-ten markets in the U.S.

“We’re very confident in our ability to start and actually complete the Chicago market by mid of ’17,” Ray said. “The lion’s share of that low-band spectrum we are licensed to go use will be on air as we go through the ’17 time frame.”

Meanwhile, T-Mobile continues to expand its retail presence across the U.S. to better leverage areas in which it has built out its network, CFO Braxton Carter said during the event. The carrier opened 400 retail outlets in the U.S. last year, according to Carter, but those stores were largely in the two-thirds of the nation where it already had a brick-and-mortar presence.

“Neville has laid the foundation with the low-band spectrum to expand our distribution footprint to 30 to 40 million people on the magenta postpaid side,” Carter said. “Now what we’re doing is starting to roll out the other third of the United States.”

Carter also said T-Mobile’s expanded network gives it a chance to compete in an enterprise market that has been dominated by Verizon and AT&T. Neither Sprint nor T-Mobile have been much of a threat in that space in recent years, but Carter implied that T-Mobile has narrowed the network gap enough to target businesses with a significant presence in multiple locations across the country.

“The second thing—and this is more of an evolution—but we still index very low on B2B. We’ve had a lot of focus on small and medium-sized business; we’ve seen a lot of success there, but Neville has the network to the point where we can actually target all enterprise,” Carter said. “And we are significantly under-indexed there—less than five percent of the marketplace. And this will again be an ongoing growth adjacency.”