T-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, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editorial Operations Director, Light Reading

MikeP688 8/9/2015 | 7:58:39 AM
Re: On the Self-Confidence of T-Mobile's CEO I will make a bold prediction:  Sprint will come back stronger than ever.   I was reading up this week-end during my "daily roundup" working on the Daily Outsider on the New President of Softbank and his $ 135 Million Dollar Salary and the heir apparent to the Founder of Softbank.    T-Mobile needs to watch its' back.    
thebulk 8/5/2015 | 1:48:16 PM
Re: On the Self-Confidence of T-Mobile's CEO I guess for now I am just going to take a wait and see persepctive on it. Time will tell. 
MikeP688 8/5/2015 | 3:16:48 AM
Re: On the Self-Confidence of T-Mobile's CEO It  may seem that way--just like w/Tablets, Computers/etc.   But AT&T seems to be seeing the light as it finished the DirectTV acquisition with its' interesting bundled pricing.  T-Mobile needs to figure out how to be "creative" as it has to contend with the onslaught--it is the No 3 player which is no small achievement.
thebulk 8/3/2015 | 9:59:13 AM
Re: On the Self-Confidence of T-Mobile's CEO Sometimes it seems that what we think of as choice, is really just a bunch of the same when it comes to mobile. 
MikeP688 7/31/2015 | 3:22:58 PM
Re: On the Self-Confidence of T-Mobile's CEO @thebulk:   We have to have such companies in order for freedom of choice to prevail.    It is always gratifying to see this--I only hope that they can sustain it and T=Mobile's parent just continues to have patience w/its' little brother.   
thebulk 7/31/2015 | 2:23:55 AM
Re: On the Self-Confidence of T-Mobile's CEO T-Mo has been through some ups and down, I have always found them to be an interesting company with their approaches. 
MikeP688 7/30/2015 | 8:06:57 PM
On the Self-Confidence of T-Mobile's CEO As I read through Sarah's Column, I could not help but reflect upon the bravado of the T-Mobile CEO as he embraked the transformation--openly being brash about challenging the big players and trying to take the no 3 spot (which he noted recently he has).  THis, to me, is another milestone.    It is a good thing for the consumer when there is choice and it is to celebrated.    That's the ultimate objective--is it not? 
milan03 7/30/2015 | 3:23:32 PM
Re: spectrum smack down He speaks the truth.
Sarah Thomas 7/30/2015 | 1:36:01 PM
spectrum smack down Neville Ray even got in on some smack talking this time, saying that Verizon sat on its A block spectrum for five years and never talked to a broadcaster. T-Mobile has come a long way with the low block, but it's still pushing for more of it from the FCC in the upcoming spetrum auction.
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