T-Mobile unveiled its 2021 goals in its first analyst day in years and first with CEO Mike Sievert at the helm. Key goals for 2021 and beyond include leading in 5G for years to come, expanding into under-indexed markets, unlocking the synergies of its merger with Sprint, and delivering better financial results outside of winning the net add game.
T-Mobile claims network lead, thinks competitors overpaid in C-band auction
- The C-band auction is over and T-Mobile claims competitors overpaid. T-Mobile will rely on its 600MHz blanket coverage and 2.5GHz mid-band spectrum acquired from the Sprint deal. The carrier claims competitors’ C-Band spectrum will need 1.5x more cell sites than its 2.5GHz spectrum.
- T-Mobile will see cost savings for years as it does not have to dramatically densify its 5G network and is also not needed to rely on dynamic spectrum sharing (DSS) for 5G blanket coverage. Its mid-band 5G rollout will be very fast, as already over 125 million POPs are covered while 200 million will be covered by 2021-end. POP coverage is expected to hit 90% in 2023.
- T-Mobile did buy some strategic C-Band spectrum in urban and suburban areas where its network is already dense. Very limited further densification will be needed before turning it on. These C-Band assets, when combined with its 2.5GHz base layer, will provide massive capacity, opening up new home broadband opportunities.
- T-Mobile has smartphones in the market which support 5G carrier aggregation (CA) with 600MHz and 2.5GHz. It is the first carrier capable of supporting CA, which will extend its network reach and increase speeds.
- T-Mobile has not spent a lot of time marketing its mmWave assets, but they are significant and only lack Verizon. Like Verizon and AT&T, there will be opportunities for private networks or other use cases where performance throughput and low latency are needed.
T-Mobile to expand into markets where it is under-indexed
- Since T-Mobile’s network was a year to 18 months behind Verizon during the transition to LTE, the operator was left out of many business segments including B2B, SMB, government and education. Even today, T-Mobile owns less than 10% of these markets while Verizon owns the majority and AT&T is also substantially ahead.
- There are new business service plans being offered which will entice B2B and work-from-home households.
- With its strong 5G footprint, T-Mobile can now move into small metros and rural markets where it is under-indexed. To help with the initiative, T-Mobile and Metro services will be available in over 2,000 Walmart and 1,000 Best Buy stores. The carrier expects to open about 500 Metro by T-Mobile prepaid stores. T-Mobile’s share is only in the low-teens in rural markets, whereas it owns about 30% market share nationally. The additional storefronts will help rural growth.
- Fixed wireless access (FWA) service is another major new opportunity that is prime for T-Mobile now that its 5G network has tremendous reach and scale. The carrier is attacking FWA differently than Verizon and AT&T. Verizon and AT&T are focusing on urban areas, offering FWA with their mmWave spectrum assets. T-Mobile will be able to focus on underserved rural and suburban areas with broadband options.
- T-Mobile believes the target of seven to eight million FWA subscribers over the next five years is attainable. Utilizing its 600MHz and 2.5Ghz spectrum assets, it can immediately start the rollout of its FWA services. T-Mobile believes it will have 500,000 households buying FWA services by 2021-end.
T-Mobile is benefitting from Sprint merger synergies
- When the Sprint-T-Mobile merger was announced, T-Mobile believed there were $6 billion in synergies to be gained. More recently, T-Mobile has increased this to $7.5 billion. Combined marketing and store counts, network synergies/ability to decommission the Sprint network, improved customer service, and retail scale have all helped increase the outlook.
- T-Mobile did a great job integrating MetroPCS, its highly successful prepaid channel. It is now ahead of schedule in the migration plan for Sprint, which is expected by the end of 2022.
- T-Mobile now has postpaid churn on a par with Verizon and AT&T. It has done an admirable job reducing Sprint’s churn, which was over double the churn of Verizon.
During Legere’s reign as CEO, T-Mobile started winning the net additions race with dozens of ‘un-carrier’ promotional initiatives. It will benefit for years to come because of its lead in 5G rollouts and coverage, which are opening up new business opportunities.
For more on T-Mobile’s device sales, 5G network expansion and B2B initiatives, contact firstname.lastname@example.org