T-Mobile US continued to position itself as the country’s leader on 5G, boosted by strong third-quarter 2020 earnings and a faster-than-expected network upgrade cycle following its merger with Sprint. 

“We are miles ahead of the competition at the dawn of the 5g era, and we're well positioned to stay ahead,” CEO Mike Sievert said during the earnings call, claiming that T-Mobile is ahead on coverage and greater availability of untapped spectrum.

“We provide more geographic coverage right now than AT&T and Verizon combined on 5G. To be more precise, our 5G coverage is double AT&T and 3.5 times Verizon’s. They claim to be nationwide, but they really only cover a fraction of the geography that T-Mobile does,” he said.

Sievert also claimed that T-Mobile’s low-band 5G network, which provides the bulk of its “nationwide” coverage claim, is delivering speeds twice as fast as 4G LTE. T-Mobile’s mid-band 5G network, running on 2.5 GHz spectrum, is now deployed in more than 400 cities and towns, covering more than 30 million people, and Sievert said the operator is on target to extend that network to 1,000 cities with coverage reaching 100 million people.

He also restated T-Mobile’s goal to have ”nationwide” mid-band 5G coverage by the end of 2021. T-Mobile’s market leading position on mid-band spectrum, a direct result of its merger with Sprint, is something that investors and industry observers acknowledge but Sievert admitted that more needs to be done to explain the merits of those holdings to existing and potential new customers.

Sievert and other members of T-Mobile’s executive team were huddled around an octagon-like setting, each separated by thick plexiglass and positioned next to air purifiers, for the duration of the livestreamed earnings call. It was a clear and unmistakable reminder that the nation is suffering from the worst rate of daily COVID-19 infections since the World Health Organization declared the outbreak a global pandemic almost eight months ago. 

It was also, in the waning days of 2020, the image of a company that banked $1.3 billion in net income on $19.3 billion in revenue during Q3. That represents a 74% year-over-year increase in revenues and a 44% jump in profit during the same period, but those figures aren’t a direct comparison because T-Mobile’s results now include Sprint’s business. A more direct comparison will start to materialize in the second quarter of 2021.

Neville Ray, the carrier’s president of technology, said 15% of Sprint’s postpaid traffic has transitioned over to the T-Mobile network. As that activity picks up during the next year, T-Mobile plans to accelerate the decommissioning of Sprint’s legacy cell sites and towers, he said, adding a complete transition of Sprint customers over to T-Mobile’s network will likely run through 2022.

“We’re on this target to deliver about 35,000 sites that would be decommissioned over the coming years and that would leave 12,000-13,000 Sprint sites that we would bring into the T-Mobile network effectively for capacity and/or coverage,” Ray said. 

T-Mobile has more than 100,000 cell sites today and plans to bring that down to as many as 85,000 by the completion of its $40 billion, multi-year network upgrade cycle, he explained. 

Amid this massive network upgrade, T-Mobile is also eyeing new opportunities with enterprise customers, Sievert said. “We think we have about an eight or nine share in this market among enterprises, large enterprises, and governments, but that’s a lot of share-taking potential. It’s going well, and like the saying goes, we’re just getting started.”

Efforts to foster new 5G services for enterprises around IoT, low latency, and edge computing are underway, he said. “But it’s not necessarily yet at scale, driving our business centered around new applications. That’s coming.”

Analysts at MoffettNathanson continued to look kindly on T-Mobile’s performance while maintaining significant skepticism about the 5G opportunity for the mobile industry overall. “5G will require enormous capital investment but promises very little in the way of incremental revenue. Use cases are elusive, and the case for higher average revenue per user is flimsy. We expect industry return on investment to fall,” the analysts wrote in a research note.

“T-Mobile, on the other hand, can benefit from 5G simply by taking share,” the firm added. As such, it expects T-Mobile to have the advantage and upper hand in the U.S. market for many years, with the operator enjoying a “long runway for share gains” that will translate to revenue growth and higher margins. 

“Competitive advantage in telecom doesn’t swing back and forth in two- or three-year cycles. It takes generations. Generations of technology, certainly — from 3G to 4G to 5G — but often, generations of time. Ten- and twenty-year cycles aren’t unusual,” the analysts wrote.