T-Mobile continues to expand its 5G network in ways that its rivals cannot match. And the operator's efforts appear to be gaining momentum.

Specifically, T-Mobile said it now covers fully 25 million people with its 2.5GHz midband 5G network, which can initially support speeds of around 100-300Mbit/s. The operator said that its midband 5G footprint will expand to 100 million people by the end of 2020.

The financial analysts at New Street Research said T-Mobile's ambitious end-of-year 5G midband coverage goal is "significantly higher" than their expectations.

Moreover, according to the financial analysts at LightShed Partners, T-Mobile is concurrently rushing to expand its lowband 600MHz spectrum holdings in ways that could increase its coverage area and network speeds. The firm said T-Mobile is seeking FCC approval to lease around 10 MHz of 600MHz spectrum in 12 of the top 50 markets – including Phoenix, Sacramento, Las Vegas, San Antonio and Indianapolis – from a company called Tstar. The LightShed analysts estimated the three-year lease is worth $300 million annually.

To be clear: This is T-Mobile's latest attempt to lease 600MHz spectrum licenses; the company is seeking similar deals with the likes of Columbia Capital and Dish Network.

AT&T and Verizon have already begun expressing concerns that T-Mobile is on its way toward gaining an "unprecedented" lead in 5G spectrum ownership.

Lowband table stakes

As of this week, all of the nation's big wireless network operators now offer nationwide 5G services working on their lowband spectrum holdings. AT&T and Verizon are both primarily using their 850MHz spectrum for nationwide 5G, while T-Mobile is using its 600MHz spectrum.

5G in lowband spectrum is generally no faster than the 20-40Mbit/s that most 4G networks can support.

As a result, AT&T and Verizon have been touting their 5G operations in their highband, millimeter wave (mmWave) spectrum holdings as supporting "real" 5G, including speeds beyond 1Gbit/s. However, due to the constrained propagation characteristics of signals in mmWave spectrum, these networks only cover small portions of a few dozen US cities. Indeed, the analysts at New Street estimate the mmWave networks from AT&T and Verizon currently cover less than 10 million people, and possibly less than 5 million people.

T-Mobile's midband 2.5GHz 5G network, on the other hand, can support speeds significantly faster than 4G across vast areas of the country.

"We view 600MHz [leases] as a stop-gap measure for T-Mobile while it cleans up and then builds out its deep 2.5GHz spectrum holdings," wrote the LightShed analysts. "We have been talking about 2.5GHz spectrum as a potential differentiator for a long time."

"We're building like crazy the transformative experience that really will change how people use their phones," T-Mobile CEO Mike Sievert said this week.

An insurmountable lead?

The New Street analysts argue that AT&T and Verizon may never catch up to T-Mobile's lead in 5G spectrum ownership – even if both operators decide to spend billions of dollars on valuable midband spectrum in the FCC's upcoming C-band spectrum auction.

"We expect T-Mobile to acquire ~60MHz of C-band spectrum in the auction," they wrote. "That may be half of what Verizon acquires, but when added to their 2.5GHz portfolio T-Mobile could still have ~220MHz of prime upper midband spectrum. That is a little less than double what we expect Verizon to get and a little more than double what we expect AT&T to get."

The analysts added that they don't believe AT&T or Verizon will ever be able to cover more people with C-band spectrum than what T-Mobile expects to cover with its 2.5GHz spectrum. "If anything, they will cover less, given the more limited reach and poorer indoor penetration of C-band vs 2.5GHz," the analysts wrote.

The New Street analysts concluded: "While AT&T and Verizon will start to close the 'fast 5G' gap with T-Mobile in 18-36 months, the best they will ever do is close the gap, and even that will be hard."

Faster and cheaper

Now, here's where T-Mobile's 5G leadership really becomes apparent: The operator charges roughly 25% less than what AT&T and Verizon do for 5G services. For example, T-Mobile's cheapest line of 5G unlimited data service costs $60 per month, while AT&T charges $65 per month and Verizon charges $70 per month.

That difference has come into stark focus following Apple's entry into the 5G market.

"When we combine service pricing with the monthly device cost on an iPhone 12 with a trade in of an iPhone 11, X or 8, T-Mobile is generally $10 cheaper than AT&T and $20 cheaper than Verizon per month," wrote the New Street analysts. "These savings start to become material; they add up to $240 per year on a 2-line plan vs. AT&T and $480 vs Verizon."

Thus, T-Mobile will soon be in a position to charge a lot less for a lot more in 5G across most of America. And it's not clear how Verizon and AT&T will be able to respond.

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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano