T-Mobile Puts Low-Band to WorkT-Mobile Puts Low-Band to Work

T-Mobile is coming off a strong second quarter in terms of customer growth and financials, but the network was really the star.

The carrier managed to completely refarm MetroPCS's CDMA spectrum and complete its customer migration, ahead of schedule. Its LTE network currently covers 290 million POPs, and T-Mobile US Inc. CTO Neville Ray said he's confident it'll reach 300 million ahead of the company's year-end deadline. And, it has what it calls wideband LTE, or 15 x 15MHz channels, deployed in 212 markets, and expects to reach 250 by the end of the year. (See T-Mobile Sunsets Last of MetroPCS's CDMA and T-Mobile Lights Up 27 Wideband LTE Cities .)

Importantly, T-Mobile's 700Mhz low-band spectrum, which is ideal for increasing capacity indoors and in suburban and rural areas, is deployed in 141 markets. Ray said that T-Mobile originally intended to add big markets like New York and LA in 2016, but will now bring them on board in the second half of 2015, along with Atlanta, Seattle and Sacramento. (See T-Mobile: Going Bananas for Low-Band and T-Mobile Spends $2.4B on Verizon Spectrum.)

T-Mobile grappled with interference issues with broadcasters that also occupy that spectrum. But Ray says the company "crushed those issues" over the last six months, allowing it to accelerate its roll out. (See T-Mobile: Channel-51 Interference a Non-Issue.)

The area T-Mobile serves with its band 12 A block spectrum is just over 100 million out of 190 million in its spectrum portfolio. It won't be able to go all the way this year, the CTO said, but it "will get damn close."

For those customers with compatible handsets, the low-band will provide a better performance, faster speeds and more capacity. Ray said he expects more handsets to support band 12 this year, but the real improvements will come in 2016. (See T-Mobile CTO: On the Road to Low-Band.)

"My goal is to have a least 50% of our customer base with low-band compatible handsets this year," Ray said on the call, although CMO Mike Seivert later added that having all its handsets support its entire spectrum portfolio would be a big opportunity for T-Mobile. (See T-Mobile Takes Spectrum Fight to the People and T-Mobile Expands VoLTE, Gets Going with 700MHz 4G.)

The big wild card, of course, is Apple Inc. (Nasdaq: AAPL). Ray and T-Mobile CEO John Legere said they don’t know, but hope the next iPhone will support low-band. "Do we expect band 12 support? The answer is yes," Legere said on the call. "We certainly would expect that, and we look forward to hearing about it in the future."

T-Mobile spent $1.2 billion, up from $982 million in the first quarter and $940 million in the year ago quarter, on upgrades to its LTE network this past quarter. Ray expects investment to continue in 2016 as it still has more work to do.

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Buoyed by these network improvements, T-Mobile's impressive customer gains continued in the second quarter, its ninth consecutive quarter of more than 1 million total net sub adds. It added 2.1 million customers, 1 million of which were branded postpaid customers and 760,000 of which were phone adds. (See T-Mobile US Tops JD Power Customer Care Rankings.)

T-Mobile also again topped the J.D. Power and Associates rankings for customer care performance in its 2015 study. (See T-Mobile Beats Sprint on Subs, Eyes Verizon on Network.)

T-Mobile has been banging the uncarrier drum since 2013, but it has spent the last month tweaking and improving its past uncarrier launches. Among other things, it has updated its Jump device leasing program, extended its Simple Choice plans to Canada and Mexico, upped its family plans to 10GB of data and added Apple Music to its Music Freedom program. (See T-Mobile Tweaks JUMP Phone Upgrade Plan, T-Mobile Stomps on AT&T's North American Footprint and T-Mobile Gives More Data to Families.)

Unlike past quarters where T-Mobile traded off subscriber additions for profits, the second quarter saw impressive gains in profits too. T-Mobile reported a profit of $361 million, or 42 cents a share, on revenue of $8.2 billion, beating analyst estimates of 18 cents a share on revenue of $7.94 billion. The carrier also said it expects both its customer growth and profit to continue to rise in 2015, sending its stock up 5.6% to $39.10 after its announcement Thursday morning. (See T-Mobile Ups Subscriber Outlook on $361M Q2 Profit and T-Mobile Sacrifices Costs for Customers.)

— Sarah Thomas, , Editorial Operations Director, Light Reading