T-Mobile outlines its next big steps on Capital Markets Day

At T-Mobile’s recent Capital Markets Day in San Francisco, the company showcased its achievements over the past three years since the last Capital Markets Day it held for financial and industry analysts. This meant T-Mobile grew for three years as a company and as a network, and how it used the merger with Sprint to accelerate growth and profitability. With that historical overview as a backdrop, the event focused on its real purpose: looking to the future and explaining the company’s plans to continue (and even accelerate) its growth using technology. Given the current market climate, T-Mobile’s plans naturally include a healthy dose of AI, including partnerships with AI leaders like OpenAI and Nvidia.

T-Mobile’s past successes

Thanks to past successes, T-Mobile has built up a lot of credibility with both sector and financial analysts. After all, it’s a lot easier to believe someone’s vision for the future if he or she has built a track record of successful execution in the past. That’s exactly what T-Mobile did at Capital Markets Day by talking about its more than 12 million post-paid net additions over the past three years, which it says is more net additions than all its competitors combined.

T-Mobile also explained how it exceeded its own expectations for the Sprint merger. It forecast $6 billion in synergy savings for the combined company, then revised that upward to $7.5 billion and ultimately beat that number by achieving $8 billion in savings and completing network integration a year early. T-Mobile has also posted mostly excellent financial results, which have driven its stock price higher, increasing the company’s market capitalization by nearly 50% over the past three years.

FWA and fiber optic future

One of the “killer apps” of 5G is fixed wireless access, known as FWA. It started in the early days of 5G with mmWave to make it easier to get signals into people’s homes, but then evolved into a way for companies like T-Mobile to compete with cable providers. T-Mobile originally aimed to have somewhere in the ballpark of 7 to 8 million FWA customers in the United States by 2025; there are currently 5.6 million, after just 400,000 were added last quarter. T-Mobile’s strategy now is to provide FWA in areas where the spectrum is undeveloped and the network is not heavily loaded by mobile customers. This is especially attractive in rural areas where T-Mobile owns spectrum licenses and may already have towers, but does not serve many users. As T-Mobile pushes to add more rural customers with this FWA strategy, it now plans to target a customer base of 12 million by 2028. T-Mobile has also increased FWA speeds by a factor of three increased since launch in Q1 2021, claiming 3x higher user satisfaction compared to cable.

However, T-Mobile’s broadband plans are no longer limited to FWA as it has entered into partnerships and joint ventures with Metronet, Lumos and others. These fiber deals will enable T-Mobile to serve 12 to 15 million households by 2030 with current fiber plans and existing partners. As a long-time fiber optic customer of a competitor’s product, I can add that fiber is vastly superior to cable in almost every way, and I believe the industry recognizes that.

T-Mobile’s competitors are already investing heavily in fiber, including AT&T with its large customer base and Verizon, which recently announced plans to acquire Frontier Communications for $20 billion. (This reunites Verizon with some of the assets, including fiber, which it sold to Frontier for $10 billion in 2016.) Clearly, fiber is the future, and as another indicator of this, even copper-based cable companies are now making regular use of fiber optic. terminology to confuse customers.

Investing in the future network

During the event, T-Mobile explained how it plans to build on its previous successes. This starts with the existing network. T-Mobile believes its spectrum and network resources are unparalleled in the industry; This claim is backed up by its nearly 400MHz of sub-6-gigahertz 5G spectrum, which is more than 100MHz more than its nearest competitor. Yes, Verizon also has mmWave spectrum, but that coverage is limited to about 1% of the United States. T-Mobile says its macro network is built on a dense midband grid that combines low-band 600 megahertz with both FDD and TDD midband spectrum to achieve better coverage and speeds. T-Mobile even showed a graph based on OpenSignal data showing that T-Mobile’s 5G availability improved from 30% in the second half of 2020 to 68% in the first half of this year. Putting this in the context of other OpenSignal data, this figure represents 5x better availability than T-Mobile’s nearest competitor.

T-Mobile also claims that its 2.5 gigahertz mid-band network offers up to 30% more coverage than C-Band, the core of its competitors’ 5G networks. T-Mobile’s 5G Advanced network also delivers 4x CA (carrier aggregation) and uplink CA, improving speeds (30%) and expanding coverage (15%) compared to the legacy network. According to data from Ookla, T-Mobile’s 5G speeds are 2.5 times faster than the competition as of the second quarter of this year, even after the rollout of C-Band. Despite all these developments, T-Mobile’s spectrum rollout is still continuing: only 60% of the 5G spectrum has been deployed and its own C-Band implementation is coming soon. T-Mobile also plans to increase the spectral efficiency of radio software features and deploy new hardware with advanced massive MIMO across all spectrum bands.

With the introduction of Standalone 5G and 5G Advanced, T-Mobile wants to continue to benefit from the new 5G possibilities. The company claims this is the first and only scaled Standalone 5G network, complete with VoNR (voice over NR), even higher order carrier aggregation (5CA), network slicing and private networks.

5G Advanced, also called 5.5G, is a half-step towards 6G, but also fulfills many of the promises of 5G because it requires standalone 5G infrastructure for most functions. (For a detailed treatment of the US carriers’ slow rollout of Standalone 5G and the historical complications that arose from it, read this research article I wrote last year.) 5G Advanced will use AI features to improve radio efficiency and speed to further improve. improve network performance. Other 5G Advanced features such as L4S should improve the quality of service, in addition to the improvements that will come from network slicing and the inclusion of RedCap for IoT. (If you’re interested in the specifics of the network standards, RedCap predates 5G Advanced in Rel. 17, but comes after T-Mobile’s rollout of Standalone 5G, so RedCap got involved in Rel. 18, also known as 5GAdvanced.)

AI partnerships with OpenAI and Nvidia

T-Mobile also uses AI to improve the customer experience. It uses customer-driven coverage – generated by AI using real customer data – to help investigate issues and make decisions based on user feedback. One way it uses AI is through partnerships with companies like OpenAI and Nvidia. T-Mobile is partnering with Nvidia to build its AI-RAN (known as AI Aerial), which the carrier calls “the multi-function cloud network of the future.” This new network will allow T-Mobile to simultaneously run telecom workloads alongside AI-RAN and device AI workloads – all on the same network – to take advantage of more AI computing available on the network. The Nvidia AI-RAN will be available through existing infrastructure providers Ericsson and Nokia. Nvidia has built a new device for AI-RAN that it calls Aerial RAN Computer-1 or ARC-1, which will serve as the fundamental modular design for the architecture. The ARC-1 uses Nvidia’s new Blackwell generation GPUs in combination with the Grace CPUs to create a complete device for AI-RAN.

In addition to Nvidia, T-Mobile has also leaned heavily on its partnership with OpenAI, which aims to revolutionize the carrier’s customer service. The partners have created a new platform they call IntentCX that aims to understand complex, multi-layered requests in multiple languages. It is designed to perform tasks autonomously with user permissions and take advantage of the billions of data points T-Mobile has collected from real customer interactions. IntentCX also aims to deliver personalized service based on existing data and provide real-time decision making and faster responses. It should help T-Mobile centralize the customer experience and become much more aware of customer needs, and in time it could even anticipate customer needs. T-Mobile expects the platform to be integrated into its activities in 2025.

T-Mobile is pursuing government contracts with T-Priority

Last but not least, T-Mobile for Business has announced a new service called T-Priority, which it claims is the world’s first network segment specifically for first responders. T-Mobile created this as a service for first responders who need more capacity or may even want a backup of current first-responder solutions like FirstNet. In fact, T-Mobile claims that T-Priority is 2.5x faster than competing offerings from AT&T and Verizon. T-Mobile also says that T-Priority has five times the network resources of the average commercial user today, which to me means T-Mobile is confident in its ability to serve first responders, even during busy times.

T-Priority is assigned the highest priority level for each 5G band, maintaining a minimum level of service even during extreme congestion. While it remains unclear how many first responders will make the switch to T-Mobile, I think it would at least be helpful to have T-Priority as a backup. I imagine that in very large emergencies, such as natural disasters, even first responder networks become overloaded, and having additional capacity like T-Priority would be very useful.

The future of T-Mobile is AI

T-Mobile’s partnerships with OpenAI for customer service and Nvidia for AI-RAN make it clear that T-Mobile is leaning heavily on AI to accelerate its future growth. The company is embracing AI in ways I haven’t seen from any other provider, even though we’re already seeing some providers, like Verizon, talking about building their own GPU clouds. T-Mobile is embracing AI in virtually every part of its business: its world-class 5G network, customer service, operations and new capabilities enabled by cloud AI. I think it will take some time to implement the AI ​​improvements that T-Mobile is using to continue its growth, but I also believe that the ROI for things like IntentCX and AI-RAN will likely be very fast.