With the industry reeling over AT&T’s announcement on Monday that it’s going to use Ericsson for open RAN, T-Mobile CEO Mike Sievert was asked about T-Mobile’s plans for O-RAN at a UBS investor event Tuesday.
“I think generally, people have presumed that kind of the de-verticalization of the industry is just a matter of time, that you want to be able to smartly buy different components up and down the stack,” Sievert said. “That's certainly our hope and expectation.”
He added that “we really deeply value our partnerships with both Nokia and Ericsson and see it as an advantage that we can buy up and down the stack from multiple partners.”
It’s also very good that the Western world has two global leaders in the wireless infrastructure space. “We're very comfortable with our relationships and highly value those deep partnerships that we have with both Ericsson and Nokia,” he said.
In a statement early Tuesday, Nokia said AT&T accounted for 5-8% of Nokia’s mobile networks net sales year-to-date in 2023 and that Nokia remains a key partner for AT&T within both its network infrastructure and cloud and network services businesses.
Spectrum & layer cake approach
All of the carriers are using low, mid-band and high-band spectrum in 5G, but T-Mobile especially has talked a lot about its “layer cake” approach, with low band at the bottom, mid-band in the middle and a smaller millimeter wave (mmWave) layer on top. T-Mobile happened to acquire a boatload of mid-band spectrum when it acquired Sprint and its 2.5 GHz stash.
Sievert said it’s important that T-Mobile has the right combination of spectrum to enable the kinds of carrier aggregation that it does. The uplink is provided by the 600 MHz low band and the downlink is provided by the 2.5 GHz mid-band, and it’s “really important that we have adequate supply of both to be able to continue this incredible advantage that we have on the network side,” he said.
In mid-band, T-Mobile bought 3.45 GHz and C-band spectrum licenses to enhance its 2.5 GHz holdings. T-Mobile had been holding off on the deployment of that newer spectrum until it had dual-band radios that could operate at both frequencies; they now have those radios, he said.
He did not share a timeframe for deploying those radios but said “we’ll just be really smart about how we do that and where we do that and data-led.”
As for the 800 MHz that Dish Network wants to buy but needs to find a way of financing it, Sievert said they arrived at a deal earlier this year with the Department of Justice (DoJ) and Dish that basically provides more certainty to T-Mobile and gives Dish until April 1, 2024, to execute on the transaction.
Dish already sent T-Mobile a non-refundable $100 million deposit on the deal and if they fail to close on it, T-Mobile is authorized by the DoJ to conduct an auction of that spectrum, the divestiture of which was a condition of T-Mobile’s merger with Sprint.
Since T-Mobile provided guidance at its Analyst Day in spring of 2021, competition from cable has increased. Sievert said T-Mobile was wrong five years ago when it made statements about cable never “making it” in wireless. Clearly, “they made it in this industry,” he said. But since then, T-Mobile has anticipated the impact of competition from cable.
In fact, he said, over the last two quarters, T-Mobile has taken roughly 40% share of overall postpaid net additions, including cable.
“They’re fully in the run rate,” he said. “We don’t set our game plan based on what they’re doing … Where they compete is reasonably consistent and we continue to be focused on our game plan, which is working beautifully. I mean, they’re a real vibrant player in the market. I’m not discounting their contribution and that they’re building a business for themselves. It’s just not affecting our game plan anymore.”
In Q3 2023, T-Mobile’s postpaid phone churn was 0.87%, the lowest churn rate ever for a third quarter in its history. While improving the churn rate is good, that still means millions of people are leaving T-Mobile, and that’s a problem.
“The answer is yes, I mean, millions less should be leaving. When you join T-Mobile … we should be in a position to serve your wireless needs for life and every single one of those decisions is regretted and avoidable. This winning customers for life, earning their relationship for life is an absolute passion at T-Mobile, top to bottom and we think there’s lots of room to run,” Sievert said.