T-Mobile President of Technology Neville Ray told the Austin audience at Informa’s Big 5G Event that extending its 2.5 GHz 5G footprint to 260 million users this year will require the carrier to build beyond heavily populated areas, and he later told Fierce Wireless the growth plan hinges on T-Mobile’s major contracts with Ericsson and Nokia.
“When we looked at how far we are pushing the features and roadmaps for these vendors, the only place we could find that is with those two,” Ray explained. T-Mobile is working with its vendors on carrier aggregation and Voice over New Radio (VoNR), which Ray said the carrier is still testing.
Ray said T-Mobile isn’t currently working with Samsung or with any open RAN vendors, although the operator did investigate open RAN extensively when planning its mid-band rollout. “We love open interfaces,” said Ray. “We are pushing hard on ORAN … we’ve got equipment we continue to test.”
T-Mobile will likely look to Nokia and Ericsson to supply more RAN gear with open interfaces, possibly making it easier to use gear from both vendors in a single RAN. Ray described investment in open RAN as “a scale game, especially on the R&D,” and he said Ericsson, Nokia and Samsung have the balance sheets to support this investment.
“I think you see AT&T and Verizon doing much the same thing as us. We are all working with our vendors to make sure the ORAN capability is there,” he said.
Ray did not say T-Mobile has no future plans to work with smaller open RAN vendors, but he made it clear the carrier will look to traditional vendors for open interfaces as well.
Monetizing 5G
When asked whether the T-Mobile team expects consumers to pay more for 5G services, Ray noted the carrier’s ARPU is stronger now that 5G is a significant part of the network, accounting for 45% of customer devices and 50% of traffic. He then highlighted the revenue potential of fixed wireless access (FWA), but said he was unsure if it would make sense for T-Mobile to break out the financial performance of its FWA business in the near future.
The economics of FWA on 5G are compelling, he argued. T-Mobile already has sites in many areas that are underserved by existing internet service providers. The carrier can add a 5G radio and supply 200 MHz of bandwidth.
“The traditional wireless network will never consume that capacity” in sparsely populated areas, Ray predicted. He said T-Mobile can use the fallow spectrum to add FWA service with “next to no equipment cost.”
“I love home broadband,” he said. “That’s the biggest opportunity in the U.S. marketplace. … Broadband is incredibly fragmented.”
T-Mobile now serves one million customers with home internet delivered via FWA, and Ray claimed the company is now the fastest-growing ISP in the U.S. T-Mobile's FWA is available to 40 million households, 13 million of which are in rural areas. But a nationwide rollout is not on the roadmap. “We only want to offer the service where we have a lot of capacity,” he explained.
Spectrum and fiber
Spectrum and fiber are the foundational building blocks of T-Mobile’s network, and Ray said the company is very happy with its lease agreements for both.
Almost 100% of the fiber T-Mobile uses is leased, and Ray described the market as “hyper-competitive.” He claimed T-Mobile is now able to lease multi-gig fiber for not much more than it once paid to lease copper lines, and he said T-Mobile leases from competitors AT&T and Verizon, as well as from cablecos and utilities. He explained that AT&T and Verizon are active on both sides of the fiber lease market, each leasing more than half the fiber used in their networks.
Although T-Mobile owns most of its spectrum, it does lease much of the 2.5 GHz EBS spectrum it uses for midband 5G. Ray said the lease terms are very favorable, but he noted the owners of that spectrum now have the right to sell it, and several are selling to T-Mobile.