T-Mobile feeling ‘very good’ after first day of trial

T-Mobile store
The first few days of a trial tend to be dominated by the plaintiffs making their case. (FierceWireless)

As the second day of its trial gets underway in New York City, T-Mobile’s got a game plan ready to go, and it’s about bringing the cultures of Sprint and T-Mobile together to create a unique combination for consumers that they wouldn’t get without the merger.

That’s the message from T-Mobile President and COO Mike Sievert, who takes over the CEO reins from John Legere next May. His comments were made at the UBS Global Technology, Media & Telecom Conference in New York today.

The combination, if approved, will result in not only a better network, and something that’s 15 times better than today’s T-Mobile, “but at the same time, lower prices,” he said.

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It also will create a company that’s able to grow while sustaining even more employees and better jobs, he added. “It’s just a win-win all the way around,” he said, acknowledging the big hurdle is to getting the deal approved through the court, which is hearing the case brought by a group of states opposed to the deal.

RELATED: T-Mobile, Sprint merger teed up for trial

That’s the main event right now, and while it’s only been one day into the trial, “our team feels great,” Sievert said. “We feel like we have a fantastic case. We have a fantastic team. We felt very good about how the first day went.” The judge made it pretty clear that he wants to wrap it up by Dec. 20 or the 23rd, and he’s asked the parties to allocate their time accordingly.

The first few days of the trial will be dominated by the plaintiffs making their case—in this situation, it’s the attorneys general from New York and California leading the states that are opposed to the merger on the grounds that it will lead to less competition and a litany of side effects.

RELATED: New York AG not budging on T-Mobile/Sprint deal

Sievert declined to go into specifics but said there’s always a potential for settlement right up until the verdict; the judge’s verdict is expected some weeks after the trial itself. “We think there’s plenty of reasons why that might make sense,” he said. “As best we can tell, the plaintiff states are very interested in making sure this market has more competition. So are we. They’re interested in making sure that this market is great for workers. So are we. We’ve been very clear that the way this company is going to be run, it’s going to need more people, not less. And they want it to be great for consumers. So do we.

“What’s interesting about this is that although we’re adversaries in a case, when you really get through it and look at the things that they say they want, they’re the same things we want, and that does give us some comfort in the fact that discussions would make sense,” Sievert said.

Of course, things have changed over the course of the two years while the transaction has been underway. The Federal Communications Commission (FCC) and Department of Justice (DoJ) gave their independent OKs to the deal with conditions, including that Dish Network get set up to compete as a fourth national facilities-based carrier. Before that happens, however, Dish will get access to T-Mobile’s network through a seven-year MVNO arrangement.

A big element Wall Street analysts and others are watching is whether the “remedy” in this case--the Dish set-up--is going to be enough for the judge to OK the deal.

Interestingly, competition in wireless is the focus around the transaction with Sprint, and according to Sievert, the cable companies are “killing it” when it comes to competing in wireless. Taken together, they’re the second fastest growing segment after T-Mobile and the fastest on a percentage basis, he said. “The cable guys are really making a difference in this market.”

T-Mobile struck a deal with Dish because the DoJ insisted on it, and it’s unprecedented, he said. It’s a set of enablements that neither Dish nor any other player would ever have gotten except for this merger. It’s the lowest priced MVNO deal that T-Mobile has ever done.  

RELATED: Dish issues the third RFP for its 5G greenfield network

Dish founder Charlie Ergen and company have made clear commitments to the government about using its spectrum, which it spent over $20 billion on over a number of years. A lot of the conditions are directly related to its performance, so it has incentive, according to Sievert.

“We’ve been very critical of them in the past for warehousing this spectrum, and I think we’ve accused them of being spectrum hoarders, but the truth is, they probably just didn’t have a business model as to how to unlock all that spectrum," Sievert said. "Because without a deal like this one, you would have to basically tell your investors, ‘I’ll tell you what I’m going to do. I’m going to stick my head down and build a network for the next several years with zero revenue and zero customers because you have to be full national before you can launch. And in a few years, I’ll launch and begin to collect my first revenue dollars, OK? So just give me the cash.’ Let’s face it, that’s tough.”

T-Mobile's spectrum layer cake

While T-Mobile is proud to be the first in the U.S. to launch a nationwide 5G network using its 600 MHz spectrum, and it has some millimeter wave spectrum, it’s planning to use Sprint’s 2.5 GHz for its mid-band layer.

T-Mobile President of Technology Neville Ray was asked during the conference about the potential for some other mid-band spectrum sources.

The Citizens Broadband Radio Services (CBRS) licensed 3.5 GHz spectrum comes with limitations—that auction is due to start next June—and there's unlicensed CBRS spectrum available before that. But Ray said while CBRS is of interest, he doesn’t think it’s going to be a big game changer.

The C-band is moving from discussions around a private auction to what the FCC has deemed will be a public auction, and the big challenge now for the C-Band Alliance (CBA) and the FCC is to determine what are the incentive arrangements going to be for the satellite companies to vacate the spectrum.

There was a big incentive when it was discussed as a private auction but when it’s flipped and the government is running the auction, that’s a different ball game, Ray said. He predicts that C-band is 12-18 months away from an auction time frame, and a minimum of 18 months from there until it becomes anything that the industry can use.

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