Land of Confusion

T-Mobile’s 5G launch illustrates marketing complexity

Last Monday, T-Mobile US announced the launch of what it calls “America’s first nationwide 5G network”, which will cover more than 200 million people and more than 5,000 cities and towns in the US.

T-Mobile claims that its 5G network will provide coverage to more than 60% of the country’s population across more than 1 million square miles, including swathes of rural areas. Anyone with a compatible device will be able to access the carrier’s 5G service, including businesses and consumers as well as post-paid and prepaid customers. T-Mobile stresses that its 5G network built on 600 MHz spectrum works well indoors, taking a clear shot at the initial roll-outs of AT&T and Verizon, which use high-band millimetre-wave spectrum.

T-Mobile has also started taking pre-orders for two new 5G smartphone models compatible with its low-band network: the Samsung Galaxy Note10+ 5G and the OnePlus 7T Pro 5G McLaren Edition, both of which are now stocked in the carrier’s stores. The Samsung device retails for $1,300 and is available to qualified subscribers for $36.12 per month over 36 months. The OnePlus phone has a retail price of $900, but customers can get it for free through 24 monthly bill credits when they port-in a number to T-Mobile and trade-in an eligible phone. Monthly bill credits is a common practice among US wireless carriers, replacing the subsidy and contract business model of past years.

T-Mobile has worked closely with OnePlus and Samsung for these phones, which are optimized for its 5G network. Both devices support T-Mobile’s 600 MHz 5G spectrum and Sprint’s 2.5 GHz band, but not T-Mobile’s millimetre-wave spectrum.

The lack of support for millimetre wave in both devices exposes an unfortunate shortcoming. The smartphones use Qualcomm’s Snapdragon X55 modem, which itself has full support for sub-6 GHz (frequency- and time-division duplex) and millimetre-wave spectrum. However, its pairing with the older Snapdragon 855 chipset means that band support is actually far more limited than the modem’s specification suggests.

This is a near-term problem — similarly challenging AT&T — that affects a small number of devices and will be overcome as devices begin to launch using Snapdragon 865 or 765 chipsets announced at Qualcomm’s Snapdragon Tech Summit this week. Still, it means that consumers buying either device today won’t be able to access the full range of 5G frequency bands as they become available.

There is a trade-off in speed and spectrum. T-Mobile’s use of low-band spectrum gives it the advantage of much better radio wave propagation compared with high-band spectrum, but this comes at the cost of throughput. Although millimetre-wave spectrum can offer data speeds of multigigabits per second, the carrier says that its low-band 5G service will deliver speeds of up to 450 Mbps. This level of throughput is already possible with 4G technologies. T-Mobile’s new 5G network will provide marginal improvements for subscribers in urban areas, but should boost connectivity for those living in more rural parts of the US. The carrier will itself also benefit considerably in terms of efficiency and cost savings over time.

All four major US carriers have been racing to launch 5G in 2019 and all have deployed it in some form or another, but mostly in select locations and with select technologies. The next notable roll-out is expected to come from AT&T, which plans to switch on its own low-band 5G service this month, albeit only in five cities. Verizon’s 5G coverage map in the US includes 18 cities but remains reliant entirely on millimetre-wave spectrum, and the carrier has yet to disclose its strategy for low- and mid-band coverage.

The US carriers are all taking different approaches to 5G deployment, with T-Mobile prioritizing coverage and AT&T and Verizon focussing on speed and capacity. The picture is very different in most other countries, which have employed mid-band spectrum for the best of both. This underlines the spectrum challenge in the US, the value of Sprint’s 2.5 GHz spectrum and T-Mobile’s need to overcome the legal challenge against its merger with Sprint from 13 state attorneys — the trial starts on 9 December 2019.

Despite these diverse strategies, successful 5G roll-outs will ultimately depend on a blend of low-, mid- and high-band spectrum to deliver coverage, performance and capacity on a nationwide basis. Millimetre wave has come under fire for its limited coverage but it wasn’t intended to operate in isolation from lower-band spectrum. We fully expect operators outside the US to begin deploying millimetre wave for urban and high-traffic environments, starting with South Korea and Japan. Similarly, technologies such as dynamic spectrum sharing will be critical to deliver 5G coverage using 4G spectrum assets.

All this is undeniably confusing for consumers, but it shouldn’t matter so long as the complexity is hidden. Unfortunately, the band limitations of the first crop of 5G smartphones exposes this complexity, but we expect these teething problems to start to fade in 2020. Every major transition in mobile connectivity has its challenges and it will take time to educate consumers that the 5G experience will vary depending on location (and spectrum).

Our prediction in 2018 that 5G would become a marketing headache because of frequency band complexity and variation in throughput performance versus 4G is coming to fruition. However, that challenge is born of 5G’s design and the need for reliable connectivity regardless of location. Difficulties faced today will be to the long-term advantage of the entire 5G ecosystem.