Does 5G make a difference? T-Mobile says yes

T-Mobile's CEO said that the operator's new Magenta Max 5G customers consume 40% more data than its other 5G customers, and fully 70% more data than T-Mobile's average 4G LTE customers.

Mike Dano, Editorial Director, 5G & Mobile Strategies

May 4, 2021

4 Min Read
Does 5G make a difference? T-Mobile says yes

T-Mobile reported first quarter customer and financial metrics above most Wall Street analysts' expectations. But the company also sought to reassure investors that its multi-billion dollar investments into its 5G network are showing signs of paying off.

Specifically, CEO Mike Sievert said that "discerning customers" are choosing T-Mobile's new Magenta Max pricing plan, which offers few limits in the amount of 5G data that customers can consume. He said that T-Mobile's new Magenta Max customers consume 40% more data than its other 5G customers, and fully 70% more data than T-Mobile's average 4G LTE customers.

"The take rate has just been amazing," T-Mobile CFO Peter Osvaldik said of Magenta Max. "There are premium customers that are attracted to this premium network."

"We've never been able to outrun the insatiable demand that customers have," Sievert said of Internet service providers in general. "So when you provide the industry's only true, unlimited plan, they do what they do, they use it up."

And that, according to Sievert, indicates that T-Mobile will be able to make a splash with its 5G network. "We're really starting to pull away from the pack," he said. "T-Mobile is positioned to maintain our 5G leadership for the duration of the 5G era."

And that will be important in the long term, according to some financial analysts.

Pushing capacity

"That T-Mobile continues to take share even in the twilight of the LTE era is reassuring," wrote the financial analysts with MoffettNathanson in a note to investors issued shortly after T-Mobile announced its quarterly results. "In a world of roughly comparable networks, they are competing on the basis of price alone… and they are taking share rapidly. In 5G, they will compete not only on the basis of the industry's lowest prices, but also the industry's best network. As we've said before, T-Mobile's 'worst to first' story is a generational one. Networks don't achieve advantage overnight, and they don't lose it overnight, either. Ten and twenty-year cycles in telecom aren't unusual."

They continued: "T-Mobile's brand, and its network, have been ascendant for years. But they have, up to now, achieved only parity. Their path to network superiority is potentially even longer, and, we suspect, even brighter."

T-Mobile, of course, is working to upgrade its 4G LTE network to 5G with the addition of the vast amounts of 2.5GHz spectrum it acquired from Sprint last year. That effort, according to T-Mobile, gives it an unassailable lead in the deployment of valuable midband spectrum for 5G, considering Verizon and AT&T won't switch on their own C-band midband spectrum until later this year at the earliest.

T-Mobile said it now covers fully 140 million people with its 2.5GHz network, which it calls "ultra capacity." By the end of this year, the company said that number will increase to 200 million people. Meantime, speeds available on that network will rise from an average of 300 Mbit/s today to up to 400 Mbit/s by the end of this year, the operator said.

And speeds will continue to rise after that, according to T-Mobile's network chief Neville Ray. "2022 is going to be even better," he said.

Q1 success, and raised expectations

Those predictions come amid significant growth for T-Mobile in the first quarter of 2021. The company again reported that it gained more postpaid phone customers than any other provider. T-Mobile's 773,000 postpaid phone customer additions during the first quarter handily beat AT&T's 536,000 and Verizon's loss of 178,000 customers, according to Walter Piecyk, a financial analyst at LightShed Partners. The figures also were above most analysts' expectations.

T-Mobile reported total revenues of $19.8 billion and service revenues of $14.2 billion.

The company also raised its customer and financial expectations for the remainder of 2021. T-Mobile said it now expects postpaid net customer additions of between 4.4 million and 4.9 million, an increase from prior guidance of 4 million to 4.7 million.

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

About the Author(s)

Mike Dano

Editorial Director, 5G & Mobile Strategies, Light Reading

Mike Dano is Light Reading's Editorial Director, 5G & Mobile Strategies. Mike can be reached at [email protected], @mikeddano or on LinkedIn.

Based in Denver, Mike has covered the wireless industry as a journalist for almost two decades, first at RCR Wireless News and then at FierceWireless and recalls once writing a story about the transition from black and white to color screens on cell phones.

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