The 600 Club

T-Mobile US Seeks New Customers with Its Extended Range LTE

T-Mobile is the challenger carrier in the US. Quarter after quarter, it has been reporting strong net additions, grabbing share from its much larger rivals AT&T and Verizon. T-Mobile has been marketing itself as the country's hip contender, winning subscribers and altering the market with new competitively priced wireless plans.

At the same time, the carrier is also slowly gaining a reputation for bringing better connectivity to more places, thanks to what it calls Extended Range LTE, the appealing name for coverage using its 600 MHz and 700 MHz network. Mobile signals propagate further at lower frequencies so are best-suited to providing wide-area coverage.

A leading focus area for T-Mobile has been the build-out of its 600 MHz network, also known as band 71. Back in the spring of 2017, it bid hard in the US government's auction for these airwaves which had been used for analogue TV broadcasting. It spent $8 billion, taking 45 percent of the low-band spectrum, covering most of the US.

At the time, CEO John Legere was quick to call its new frequency asset a game-changer for the US wireless market, and with some validity. That low-band spectrum would enable T-Mobile to improve coverage in rural areas and offer better LTE connectivity indoors in urban locations.

T-Mobile got down to business almost immediately after the auction, building out its 600 MHz network at a "furious pace." It was a significant investment, but the carrier needed manufacturers of components and hardware to address the other side of the equation, developing parts and devices to take advantage of its new spectrum.

The good news for T-Mobile is that the phones customers most want are designed to take advantage of its low-band spectrum. T-Mobile lists 17 smartphones that support 600 MHz on its website, and there are more coming. Apple's latest iPhones are compatible, as are Samsung's newest phones. This includes support through carrier aggregation, allowing devices to combine several bands for increased throughput.

It's also important to note that the 600 MHz spectrum will play a leading role in T-Mobile's 5G plans. The company is seeking to take a distinctive position compared with rivals AT&T and Verizon, by tapping into this spectrum to achieve a "nationwide" 5G network. However, in our view, it's questionable whether the low throughput achievable at 600 MHz will bring customers the 5G experience they would expect, even if it will enable the carrier to gain widespread coverage more quickly.

Now that the third financial quarter has come to an end, we're waiting for carriers to announce their results. We believe that T-Mobile will report another strong period. Company executives will certainly point to its strength in network, and in particular, the implementation of its 600 MHz spectrum and compatibility with the country's most popular smartphone models.

If cost savings and coolness have drawn many new subscribers to T-Mobile during the past few years, we believe that its network reputation will be a vital contributing factor in many areas of the US. T-Mobile is now or soon will be offering better coverage where there was little or none before.

We expect Apple's soon-to-be-released iPhone XR, the "entry" model of its new generation of smartphones, will be the most popular in the series, driving most sales volume among the three phones it introduced in September. This means that the fourth quarter should give T-Mobile an even greater boost and more reasons for its senior leadership to highlight the talents of its new frequency band.

As T-Mobile heads into a potential merger with Sprint and prepares for 5G build-out, it will seek a reputation for having a network that's in line with that of its biggest rivals AT&T and Verizon. If commoditization wasn't already a concern among wireless carriers, it should be now.

This entry was posted on October 9th, 2018 and is filed under Services. You can follow any responses to this entry through the RSS 2.0 feed or you can leave a response.

Posted By Raghu Gopal On October 9th, 2018

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