Company / division: T-Mobile
A few weeks back, T-Mobile announced it was rolling out LTE-U on its network, but it made little difference because no-one had a device that could take advantage of it. As I said then, phones with Qualcomm’s Snapdragon 835 chip were likely to be among the first to support the functionality, and today T-Mobile confirmed that the Samsung Galaxy S8 will be the first device. It also touted several other related LTE technologies which will make the phone operate faster on its networks than competitors’. It still feels like an exaggeration to call it a gigabit-class smartphone though, as T-Mobile does in this press release – I very much doubt anyone is going to see sustained gigabit speeds in real-world usage.
CTIA, which is the industry association that represents the largest US wireless carriers, is arguing before the FCC that it shouldn’t be subjected to new rules on sharing data it collects on its users. The carriers have argued that Google and other online service providers aren’t subject to the same rules (those companies are regulated primarily by the FTC rather than the FCC) and so for consistency’s sake the carriers should be treated the same way. This is really about a technical definition of the word “sensitive” – clearly the kind of data being talked about here is indeed enormously sensitive, but the real question is how disclosure of that data is regulated. This matters because, for example, AT&T as a fiber broadband carrier in certain parts of the country has offered a service discount for customers who consent to tracking of their web browsing history and so on, something which it argues Google does all the time without explicitly asking for users’ permission to do. What the carriers are arguing here is that it should be allowed to continue to do this kind of thing without having to ask users to opt in first. The carriers look likely to win given the current hands-off policy stance of the FCC, which means more erosion of user privacy for users, but the proper approach would be for the FTC and FCC to work together to craft a set of consistent rules that would apply to all players that get access to similar data, rather than each regulating in a vacuum.
via Ars Technica
T-Mobile Continues to Boost Capacity for Customers with LTE-U Launching in Spring 2017 – T-Mobile (Feb 22, 2017)
T-Mobile has been touting LTE-U as a potential extension of its current LTE capabilities for several years now, but needed FCC permission to begin actually deploying the technology, which operates in some of the same bands as WiFi. It now has that permission and will apparently begin rolling out the technology to customers in the Spring, though none of the devices currently in T-Mobile customers’ hands actually support LTE-U – those will start arriving later this year, CTO Neville Ray told me. The technical marketing lead for Qualcomm’s LTE and 5G modems tells me that devices carrying the new Snapdragon 835 chip and X16 LTE modem will support it. So until there’s widespread adoption of new devices capable of supporting the technology, and widespread support in the network, this isn’t going to have much consumer impact. In the meantime, there’s good marketing fodder here about being first (as with Verizon’s 5G announcement earlier).
SoftBank eyes Sprint, T-Mobile deals – CNBC (Feb 17, 2017)
This isn’t a huge surprise – ever since Donald Trump won the US presidential election in November, the odds of a deal involving Sprint and T-Mobile have gone way up, because the incoming administration is likely to be much friendlier to consolidation. However, that’s no guarantee that a deal will get done – last time around SoftBank was the driving force behind the deal and very keen to control the resulting entity, whereas at this point it seems a lot less committed to its US wireless adventure. At the same time, T-Mobile USA is performing much better as an investment for Deutsche Telekom, making it less likely to sell. One option would be for Deutsche Telekom to take over Sprint, but it’s far from clear that it wants to (and it would certainly be awkward regardless given TMO CEO John Legere’s constant belittling of Sprint). Then, of course, there’s the question of whether a merger is a good idea. On the one hand, scale continues to be enormously important in the market, and Sprint and T-Mobile have a big disadvantage here, but on the other T-Mobile has been pretty well anyway by itself, while Sprint has been doing far less so (or growing by sacrificing margins and revenues). And it will be very hard to argue that a merger at this point would be good for competition, even with Republicans in charge at the FTC, DoJ, and FCC.
T-Mobile US Reports Q4 2016 Results (Feb 14, 2017)
T-Mobile reported its Q4 results this morning – the last of the major US wireless carriers to do so – and as usual it’s beating all the others handily on postpaid phone subscriber growth and making decent progress on growing its margins. It added several times as many postpaid phone subscribers as any other carrier, but in other categories like tablets and “connected devices” (think cars, machine to machine, connected utility meters) others were ahead, with AT&T leading the market in both those categories. T-Mobile says it has seen much higher porting ratios (the ratio of subscribers won versus lost from a particular carrier) against Verizon this quarter, which would help explain the latter’s rapid shift in stance on unlimited plans. T-Mobile continues to be quite a bit smaller than the big two, and that’s a big driver of its lower margins, but the fact that it’s willing to take those lower margins enables it to win subscribers with aggressive pricing, especially since its network performance and coverage is constantly improving. I continue to be skeptical that T-Mobile’s strategy is sustainable over the long haul – it’s very focused on phones, which aren’t growing much anymore, and hasn’t invested as its two largest competitors have in newer growth categories, but for now it continues to capture lots of attention and make the other carriers look bad.
via T-Mobile (PDF release)
T-Mobile likes OpenSignal, Speedtest.net, and other network testing services and apps which rely largely on reporting from users’ devices, as opposed to the industry’s traditional reliance on professional testing services like RootMetrics. And the reasons are obvious: T-Mobile consistently puts in a much better showing in these reports than it does on the ones used by the rest of the industry. On the basis of this OpenSignal report, it looks like T-Mobile is basically tied with Verizon for the network available in most places and at the highest speeds nationally. That totally flies in the face of the reporting done by the professionals (see this RootMetrics report for H1 2016), and also goes against official coverage numbers from the other carriers.T-Mobile reasonably make the claim that the OpenSignal results are from real people actually using its networks throughout the country, not from testers only going to certain places, but self-selecting surveys of any kind are always unreliable. The reality is that T-Mobile has caught up a ton over the last few years with the two big carriers, but it’s still behind in coverage and quality, and you’ll see far more people complaining about their T-Mobile coverage than AT&T and Verizon customers do. Perception also lags reality – T-Mobile still has a reputation for poor coverage and quality even as the true gap with the big guys narrows.
The headline here is strong growth, though compared to last year’s results there aren’t huge differences. Total branded net adds were actually down slightly, largely because of lower mobile broadband (tablet) net adds, while wholesale adds were up slightly (these may both have been caused by a shift of subscribers from retail to wholesale last quarter in connection with a Walmart deal), and overall net adds were up slightly too. As the traditional phone market slows down, it’s going to be tougher for T-Mobile to keep driving growth in net adds, and it doesn’t yet seem to have cracked new categories beyond phones, which continues to be my main concern about its longer term prospects.