T-Mobile US management is starting to lean more heavily into the physical AI space but does not expect real business from such opportunities until well into the next decade.

T-Mobile US CEO Srini Gopalan told investors during the carrier’s latest earnings call that the physical AI market was still in its “very early innings” and that no one can really say what that market will “look like in 2035.” However, Gopalan did state that learnings from the current generative AI surge has shown a strong need for physical infrastructure, and specifically three elements.

“It needs low-latency connectivity, it needs inference at the edge, and most likely for a lot of use cases, it needs voice,” Gopalan said, adding conveniently that those were three items T-Mobile US has available.

“We feel like there is going to be this big build out,” Gopalan said of that infrastructure. “Not going to sit here and speculate whether that is [20]27 or [20]28, but for sure it'll happen by [20]35, and that we're in pole position to be accessing that build out on the economics of the model and everything that we're doing with our Kinetic Edge.”

That last reference was to the carrier’s commercial AI programs, including its Kinetic Edge AI infrastructure platform.

Despite touting those efforts, Gopalan did admit that initial AI-related edge efforts have been more about finding the right use cases as opposed to actually generating revenues.

“The early use cases have really not been about selling connectivity or selling compute separately, they've been about selling solutions, and those solutions typically what they've done, and this is the important bit, they've reduced the cost of the device because suddenly you don't need as much battery, you don't need as much AI on board because you can offload that compute, and when you reduce the cost of a device, people are paying for a solution rather than specific pieces of it,” Gopalan explained. “So most of our monetization to date has been through providing that solution as a whole and charging for the solution and taking a share of the reduction of the cost of the device.”

AI feeding 100% spectrum efficiency gains

While physical AI remains a tomorrow opportunity, T-Mobile US is seeing AI-related spectrum efficiency improvements across its radio access network (RAN) today.

CTO John Saw said that the carrier has “handed the wheel to AI for doing things like radio resource planning” and that those efforts have shown “gains more than what we expected.” This includes a doubling of spectral efficiency in some cases.

“With Nokia, they are really talking about spectral efficiency gains of 20% up to 100% as AI RAN develops,” Saw said of that work, adding, “so the upside is not done yet and we are optimistic that potentially there could be even better spectral efficiency coming.”

That efficiency could become more important as T-Mobile US continues to lean on its fixed-wireless access (FWA) service to drive broadband penetration. The carrier claimed that it led the industry in FWA connection growth during the latest quarter and that it remains committed to serving up to 15 million FWA connections by the end of the decade.

Shooting down Starlink Mobile concerns

Gopalan also continued to echo past comments downplaying competitive concerns from SpaceX’s Starlink Mobile broadband plans and that T-Mobile US does not see any need to partner with the Elon Musk-led firm through a mobile virtual network operator (MVNO) model.

“We've been very clear that in terms of satellite: we see it as a complementary product and therefore we don't really see the room for an MVNO for satellite or SpaceX in that context,” Gopalan said, later adding that this also includes physical and edge AI use cases. “We see no space for an MVNO here because what additional capabilities does it give us? Why does it change our ability to compete? If we're talking about SpaceX as a customer or us being a customer of them, that's a purely commercial agreement. But the answer to the MVNO is I see no room for an MVNO with SpaceX either on the consumer side or on the physical and edge AI side.”

Gopalan’s comments were less confrontational than those offered up recently by Verizon CEO Dan Schulman, who told investors during that carrier’s latest earnings call he is operating on the assumption that SpaceX will indeed move forward with its offering and that Verizon is ready for combat.

“I welcome the opportunity to compete against them,” Schulman said of SpaceX’s cellular rival. “It's very hard to throw a punch against something that doesn't exist, but once they come into the market, we will be ferociously competitive.”

Schulman explained that his “operating assumption” is that SpaceX will launch a Starlink Mobile service, and “that they will execute flawlessly. … I think assuming anything else makes no sense from my perspective.”

However, Schulman is in alignment with Gopalan when it comes to any potential MVNO arrangement with Starlink Mobile.

“There is no benefit to Verizon extending an MVNO deal, and we look forward to being able in four, six years to finally punch back, and we'll punch back hard when that happens,” Schulman said.