T-Mobile Wants Incentive Auction Spectrum, Says Position Is Otherwise Strong
T-Mobile is well positioned on spectrum, but remains focused on the TV incentive auction, T-Mobile executives said on an earnings call with analysts Thursday after the carrier released its Q2 results. T-Mobile Chief Technology Officer Neville Ray said T-Mobile continues to view the TV incentive auction as a “great opportunity.”
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T-Mobile CEO John Legere was asked by an analyst whether his company was in danger down the road of running out of spectrum. “Wouldn’t you ask that question to all of the other carriers?” Legere asked. “When you get to the medium- to long-term absolutely everybody needs new sources of supply. Not just us.” All the carriers have different paths to finding more spectrum, he said. “We are still in a superior position as it relates to supply per customer as defined by MHz/POPs.”
“It’s obviously an important topic and discussion for the industry -- there’s a lot of growth,” Ray said. “We’re very well positioned for that growth.” Ray said less than half of the spectrum T-Mobile owns is “committed to LTE today.” T-Mobile has refarmed the spectrum it got from its purchase of MetroPCS and now has “the best mid-band, contiguous spectrum position,” he said. Less ideal mid-band spectrum and “throwing tens of thousands of small cells at the problem” won’t give another carrier as good of portfolio as T-Mobile, Ray said. T-Mobile is also committed to making use of unlicensed bands through LTE-unlicensed, he said. “We’re working furiously to bring products to market,” he said. T-Mobile is well along toward building out the 700 MHz spectrum it owns, Ray said. “It’s coming in. It’s an additional layer of capacity,” he said. “Yes, we want to add more low-band” but T-Mobile already covers 190 million POPs with the low-band spectrum it has, he said.
The biggest goal is to complete T-Mobile’s low-band footprint across the U.S., Ray said. “We need to ensure that the big duopolists out there don’t sit and hog all of the low-band spectrum,” he said. Ray said Verizon and AT&T own almost 75 percent of low-band spectrum: “We’re hell-bent on making sure those numbers and ratios change.”
The U.S. wireless industry won't remain a market largely dominated by four national carriers, Legere said in another segment of the call. At some point it will seem “completely humorous” to think the industry won’t change, he said. “Ultimately Google, Comcast, other players are going to migrate into this space,” he said. That's why T-Mobile signed on to provide some of the spectrum on which Google’s new wireless spectrum will ride (see 1504220059), he said. If Google is “moving into this space with the capability that they have I want to partner with them,” Legere said. “We’re looking forward to see what they choose to do in the future and hope that they do it with us.”
T-Mobile reported 2.1 million net adds in the quarter, including 760,000 branded postpaid adds. Churn was the same as Q1 at 1.3 percent, a record low for the carrier. T-Mobile reported $361 million in net income, on $8.2 billion in total revenue. T-Mobile shares were up almost 5 percent in late afternoon trading on Thursday to $38.86.