T-Mobile US and Sprint were both short on new 5G details during the release of their most recent quarterly results, even though the technology has become more important now that their larger rivals have either launched or are set to launch 5G services.
T-Mobile CEO John Legere told investors during the company’s third quarter results conference call that it remains on track to deploy 5G equipment in six of the nation’s 10 largest markets by the end of the year. However, there was no mention of commercial availability of that network beyond it being ready for the introduction of 5G smartphones in 2019.
The carrier does remain committed to taking that 5G network nationwide using standards-based 5G equipment in 2020. And Legere used that fact to take a shot at Verizon’s current 5G deployment that relies on a non-standards-based technology.
“I would call that a laboratory marketing-based fiction approach,” Legere said.
AT&T received slightly more favorable treatment from Legere, with the CEO only slamming that rival for its initial reliance on millimeter wave (mmWave) spectrum that will limit its initial reach. AT&T as part of its recent Q3 conference call said it would launch standardized mobile 5G service in parts of 12 cities in the next few weeks.
T-Mobile CFO Braxton Carter reiterated that the carrier remains on track to hit the upper end of its capital expenditure guidance at around $5.3 billion for the year. That number includes spending tied to the carrier’s 5G deployment.
That network deployment is initially relying on the carrier’s low-band 600 MHz spectrum that allows for a broad reach per cell site. But, T-Mobile CTO Neville Ray said the carrier would also participate in the FCC’s upcoming mmWave spectrum auctions and was interested in the CBRS spectrum that resides around the 3.5 GHz band.
“So there is more spectrum coming for the 5G era, which is great,” Ray said. “We’re always going to need more spectrum.”
T-Mobile is set to acquire a chunk of spectrum from its pending purchase of Sprint. Both operators have touted the densification enhancements of Sprint’s vast 2.5 GHz spectrum holdings.
Tied to the release this morning of results for its second fiscal quarter of 2018, Sprint said it has installed support for that spectrum band on 70 percent of its larger cell sites. That spectrum is currently supporting the carrier’s 4G LTE service, but with pending software upgrades to those towers and the installation of massive multiple-input multiple-output (MIMO) antennas it will be able to support 5G services.
Sprint remains on track to commercially launch mobile 5G services in nine markets early next year. CTO John Saw previously noted that Sprint plans to use around 60 megahertz of its 2.5 GHz spectrum to support those 5G services.
He explained that the 2.5 GHz spectrum band provides better coverage from the same cell site than the mmWave bands being used by Verizon and AT&T. As an example, Saw said that Sprint’s initial 5G deployment plans in Phoenix will cover more than 226 square miles and 2 million people. “This is not just hot spots,” he said.
Sprint did slightly tighten its capex outlook for its current fiscal year, stating it plans to spend between $5 billion and $5.5 billion. It previously had that amount capped at $6 billion.
Financially, T-Mobile posted an 8.2 percent year-over-year increase in Q3 revenues to $10.8 billion. Net income increased a more robust 44.5 percent over the same time period to $795 million.
Sprint posted a more modest 6.3 percent year-over-year increase in fiscal Q2 revenues to $8.4 billion. Net income posted a more substantial improvement, reversing from a loss of $48 million last year to a $196 million profit this year.
T-Mobile’s pending acquisition hit a milestone this morning as its shareholders voted in favor of the transaction. The deal still needs regulatory approval, but T-Mobile management said it expects to close the purchase during the first half of 2019.