T-Mobile 5G strategy: an opportunity to innovate and grow market share
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T-Mobile 5G strategy: an opportunity to innovate and grow market share
T-Mobile 5G strategy: an
opportunity to innovate and
grow market share
Roberto Kompany
T-Mobile 5G strategy: an opportunity to innovate and grow market share 2
Overview of T-Mobile USA: an end-to-end nationwide 5G deployment will be critical
for continued success, but lack of c-band spectrum will affect customer experience
STATE OF THE BUSINESS 1 FOCUS OF THIS EFFORT PROJECT APPROACH
40.6 5.7 3.5 31 264
8.3 2020 NSA 2
billion million billion MHz MHz
Total revenue Year-on-year Total net Nokia 5G deal Nationwide 5G 5G architecture Number of Spectrum in Spectrum in
(USD) growth (%) customer (USD) coverage target to be deployed major RAN 600MHz band 28GHz band
additions date vendors
BUSINESS DRIVERS STRATEGY ANALYSIS
▪ To continue growth of next-generation ▪ T-Mobile entered into a USD3.5 billion ▪ T-Mobile has engaged Mavenir and
mobile market share, following a 22 contract with Nokia to deploy a complete Samsung, but no major RAN deals have
consecutive quarter run of over 1 million net end-to-end 5G network. been announced beyond those with Nokia
additions. and Ericsson.
▪ T-Mobile plans to have a commercial
▪ To drive customer satisfaction through nationwide 5G network in 2020. ▪ T-Mobile owns 31MHz in the 600MHz band,
continuous LTE network improvements and which is good for coverage, but is unlikely to
5G investments. ▪ T-Mobile plans to launch 5G services using deliver a major 5G speed boost.
non-standalone (NSA) architecture.
▪ To drive synergies. T-Mobile announced a ▪ Spectrum in the 28GHz band will serve for
second attempt to merge with Sprint hotspots or fixed–wireless (FWA) service,
following a failed attempt in 2014. but not coverage.
BENEFITS
5G will deliver superior network performance Use 600MHz spectrum to deliver nationwide 5G Continue to grow market share as market disruptor
coverage in 2020
Source: Analysys Mason
1 T-Mobile USA, 2017 annual report
T-Mobile 5G strategy: an opportunity to innovate and grow market share 3
Business challenges and key drivers of T-Mobile 5G deployment project
T-Mobile is committed to delivering a high quality network to its Figure 1: Business factors that are driving the network
customers and it is investing in the latest LTE technology enhancement project
upgrades, while laying the ground works for 5G.
T-Mobile announced its 3Q 2018 results in October where it NEW
announced 22 quarters of over 1 million net additions. T-Mobile EFFICIENCY AGILITY SERVICES
disrupted the US market when it announced its ‘Un-carrier’
strategy in 2013 and eliminated the two year contract model and
40% 30% 30%
removed handset subsidies. The strategy had advantages for both
T-Mobile’s finances and customers who wanted flexibility to
migrate to another MNO without being locked-in for the full two
years.
The larger MNOs, AT&T and Verizon, soon followed, however, T-
Mobile also engaged in aggressive price competition and tariff
simplification. T-Mobile has successfully grown its market share at
Continue to gain
the expense of revenue per subscriber. Continue to improve
subscriber net
Start with eMBB and
data throughput FWA
additions
T-Mobile re-introduced unlimited data bundles in 2017, which
allow subscribers to stream high-definition (HD) video to their
handsets. This strategy increased customer satisfaction and Improve network
Reduce churn
Create a platform for
network traffic. To meet this challenge, T-Mobile continuously capacity new services
invests in its LTE network to increase quality and capacity.
T-Mobile has rolled out multiple LTE technology enhancements, Encourage in-house
Lower cost per bit
such as 4x4 MIMO antennas and carrier-aggregation techniques. innovation
The MNO, however, must take steps to future-proof its network
and effectively compete with AT&T and Verizon. Its 5G Source: Analysys Mason
investments are a natural evolution of its LTE strategy.
T-Mobile 5G strategy: an opportunity to innovate and grow market share 4
Analysis – T-Mobile US is committed to nationwide 5G coverage in 2020, but lack of
mid-band spectrum will challenge customer experience in the short term
T-Mobile will launch 5G services, but unless the FCC releases Figure 2: Mid-band spectrum landscape by market
more spectrum in the mid-band, services will be limited.
Verizon launched its FWA service in October, followed by AT&T in
December placing the US amongst the first countries to launch
5G services. Both AT&T and Verizon have fixed networks and have
announced intentions to augment these with FWA services. T-
Mobile, however, will continue to focus on mobile-only services in
the short term.
T-Mobile plans 5G nationwide coverage in 2020 using its recently
acquired 600MHz spectrum, but the lack of 3.5GHz will restrict
deployment of massive-MIMO antennas for macro-level 5G = Released
services.
The US currently lags other advanced global regions, such as Asia = Planned
and Europe, where the 3.5GHz spectrum auctions are underway.
This band is considered a key building block for 5G services
thanks to its unique abilities to both travel far and offer high
capacity for mobile traffic. While the Federal Communication
Commission (FCC) will make 150MHz of spectrum available using
the Citizens Broadband Radio Service (CBRS) from 2019, not all
of this will be available to MNOs.
T-Mobile also aims to acquire more mmWave spectrum in the
28GHz and 24GHz bands during auctions in November and Network capacity
December, to supplement its current holdings. These bands will 3.4 3.8 4.2 4.6 5.0
Mid-band
be used for high-speed hotspots, rather than nationwide
coverage.
T-Mobile 5G strategy: an opportunity to innovate and grow market share 5
Key benefits
1 2 3
5G will deliver superior network Use 600MHz spectrum to Continue to grow market share
performance deliver nationwide 5G coverage as market disruptor
in 2020
5G network will enable T-Mobile to T-Mobile will use its 600MHz spectrum T-Mobile will build on its current LTE
deliver mobile traffic at a lower cost per asset to deliver nationwide 5G coverage network speed leadership1 success,
bit and improve customer satisfaction. in 2020. T-Mobile is the only North leverage its upcoming 5G launch and
The long-term partnership with Nokia American MNO with dedicated sub- continue network innovations together
will support T-Mobile’s efforts to focus 1GHz 5G spectrum assets, which are with its partners, to continue the
on network improvements, and deploy perfect for wide-area coverage industry disruptor strategy and grow
5G hardware, allowing it to successfully compared to the mid-band or mmWave market share.
compete with its larger competitors. spectrum. It has aggressively deployed
this band in over 1500 cities and town
in 37 states and Puerto Rico
1 T-Mobile US reports Third Quarter 2018 Results
T-Mobile 5G strategy: an opportunity to innovate and grow market share
FURTHER INFORMATIONT-Mobile 5G strategy: an opportunity to innovate and grow market share 7
Solution approach: The NSA option 3x architecture will enable T-Mobile to deploy
5GNR quickly, leveraging existing LTE network
To reduce deployment time and costs, T-Mobile will use NSA Figure 3: NSA architecture scenarios
option 3x architecture leveraging dual-connectivity to create a
smooth experience.
T-Mobile will initially deploy its 5G network using NSA option 3x
architecture where the 4G core, i.e. evolved packet core (EPC) is
used instead of the 5G core. There are three possible Option 3 Option 3a Option 3x
configurations within option 3, shown in Figure 3.
The advantages of NSA architecture are the reduced complexity EPC EPC EPC
and rapid time-to-market, which allows MNOs to deploy 5GNR
alongside existing LTE infrastructure, without the need to deploy
S1-U S1-U
the more complex 5G core. Given the dual connectivity scenario,
there will be virtually no delay in moving from one radio access
technology (RAT) to another, unlike the ‘interRAT’ procedure used X2 X2
during handover between 3G and 4G radio technologies that LTE 5GNR LTE 5GNR LTE 5GNR
created delay and on occasion, dropped call.
Contrary to option 3 and 3a, option 3x allows 5G new radio (NR)
to be connected simultaneously to both the EPC and the LTE cell
via the traffic plane S1-U and the X2 interfaces, respectively. This
serves to reduce the need for backhaul and 4G hardware capacity
upgrade. The control plane always terminates at the LTE cell.
In option 3, the LTE site must carry all the 5GNR traffic and Key:
therefore a hardware upgrade to the site and the backhaul would Traffic plane
be required. Option 3a splits the traffic flow at the EPC and Control plane
therefor no capacity processing is required at the LTE site.T-Mobile 5G strategy: an opportunity to innovate and grow market share 8
Further reading
Type Title Author(s) Link
5G new radio delivers mechanisms to permit use cases http://www.analysysmason.com/Research/Content/Co
Comment Roberto Kompany
that require ultra reliability and low latency mments/5g-new-radio-rma18/
Three critical enablers of 5G: adoption patterns in small Caroline Gabriel http://www.analysysmason.com/Research/Content/Rep
Strategy report
cells, cloud-RAN and SONs Roberto Kompany orts/5G-technology-enablers-RMA18/
Strategy report 5G transport network: x-haul architecture is needed to http://www.analysysmason.com/Research/Content/Sho
Roberto Kompany
meet future mobile traffic challenges rt-reports/5G-xhaul-architecture-rma18-rma07/
http://www.analysysmason.com/Research/Content/Sho
Forecast report Next-generation wireless: vEPC forecast 2017–2021 Roberto Kompany
rt-reports/nextgen-wireless-vepc-rma18/
The US broadband market is underserved; Verizon’s 5G http://www.analysysmason.com/Research/Content/Co
Comment Roberto Kompany
FWA launch should trigger increased competition mments/Verizon-5G-FWA-RMA18/
MulteFire: vendors have an opportunity to accelerate www.analysysmason.com/Research/Content/Short-
Strategy report Roberto Kompany
small-cell deployment in unlicensed spectrum reports/MulteFire-small-cells-RMA18/
Strategy report Massive MIMO antennas: gigabit LTE and 5G will drive Roberto Kompany http://www.analysysmason.com/Research/Content/Sho
market expansion, but MNOs must tread with care rt-reports/massive-MIMO-antennas-RMA18/
Strategy report Next-generation wireless network investment: LTE will Roberto Kompany http://www.analysysmason.com/Research/Content/Rep
fill the 5G gap for operators and vendors orts/5G-gap-LTE-RMA18/
Case study Telefónica: a new approach to rural network Roberto Kompany http://www.analysysmason.com/Research/Content/Cas
transformation e-studies/telefonica-rural-connectivity-rma18/T-Mobile 5G strategy: an opportunity to innovate and grow market share 9
About the author
Roberto Kompany (Senior Analyst) is a member of Analysys Mason’s Telecoms Software and Networks research team and is the lead analyst
for the Next-Generation Wireless Networks research programme focusing on strategy and market research. He is also a Cambridge Wireless
Special Interest Group (SIG) mobile broadband (MBB) champion and a regular speaker at industry events. Prior to joining Analysys Mason,
Roberto worked for Dixons Carphone, where he analysed the effect on the business of shifts in the telecoms market – for example, in terms of
mergers, operator KPIs and technology – in Europe and the UK. Previous positions included consultancy, where he helped a variety of clients
worldwide with mobile-related projects, such as a capex reduction and developing a 5-year strategy for an incumbent’s wireless infrastructure.T-Mobile 5G strategy: an opportunity to innovate and grow market share 10
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T-Mobile 5G strategy: an opportunity to innovate and grow market share
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