The FCC's Spectrum Push and T-Mobile's AI Transformation

Full Transcript

Don Kellogg 0m10s

Hello, and welcome to the three hundred and seventeenth episode of the week with Roger, a conversation between analysts about all things things telecom, media, and technology by Recon Analytics. I'm Don Kellogg, and with

Roger Entner 0m20s

me as always is Roger Entner. Roger, how are doing?

Guest Speaker 0m22s

I'm great. How are you?

Roger Entner 0m24s

I'm good. So we've got another auction coming.

Guest Speaker 0m27s

Well, we got another auction coming. The question is when. Right?

Roger Entner 0m30s

Right.

Guest Speaker 0m30s

I feel a little bit like Christmas is coming. I just don't know when Santa is gonna show up. So the FCC announced that it would see comment on an auction of 25 megahertz of more mid band spectrum, which lies sixteen seventy five to sixteen ninety five.

Roger Entner 0m48s

That's like pretty low mid band too. Right? I mean, that's...

Guest Speaker 0m50s

That's pretty exciting, that mid band. Yeah. And then another five megahertz twenty twenty to twenty twenty five. This is really, really interesting because you need to start connecting dots. For the people who don't know the spectrum allocation and the bands by heart, I'm not one of them.

Guest Speaker 1m9s

I have to look it up. But for those who are like me who need to look it up. This basically hugs the AWS four spectrum on both sides. So this makes this much nicer. It also is adjacent to the Ligado spectrum, which is terrestrial and space spectrum.

Guest Speaker 1m30s

So Ligado could buy this. The spectrum can be used for terrestrial five gs or six gs, whatever, and direct to device, or both. So this is ideal for either a mobile carrier, you know, the joint venture with no name, or for a satellite company to pick up, or for Ligado.

Roger Entner 1m51s

And it's low enough frequency that it should have really good propagation characteristic.

Guest Speaker 1m55s

It has reasonably good propagation. On top of it, on the other side of Ligado is, drumroll, Starlink's satellite MSS spectrum. So if you connect the dots and say like Elon Musk buys Ligado and buys this spectrum, now you have like a massive amount of spectrum. In my opinion, Elon Musk has a lot more money than Ligado has. And one could buy one much more easily than the other and create quite the extensive spectrum band here in the mid band spectrum that can do both terrestrial and direct to device spectrum.

Guest Speaker 2m39s

So the FCC is really, really smart here in setting this up.

Roger Entner 2m44s

Everybody's going to have to bid on it, right?

Guest Speaker 2m46s

Everybody is

Roger Entner 2m47s

Offensive or defensive reasons.

Guest Speaker 2m49s

Exactly. And so when Chairman Carr said like, oh, you know, we're going get $100,000,000,000 I was like thinking, how are you going to do that? Well, here enters this auction from the left or from the right, actually. I would think it would be offended if I say the spectrum comes in from the left. So here it comes from the right, thanks to Brendan Carr.

Guest Speaker 3m12s

We had Arben Sura here. He didn't talk about this, but I'm sure he had it in mind. If you haven't listened to that episode, please do. He talked about bringing more spectrum really quickly to play. And so here is that.

Guest Speaker 3m26s

And then we have another announcement from the FCC, right, that plays into this.

Roger Entner 3m31s

More satellites? More satellites, right?

Guest Speaker 3m33s

Yeah. So the FCC approved 15,000 satellites for Starlink. So more satellites means more capacity. It means probably with B3 satellites, really good latencies. This is all on that path to make five gs NTN a reality.

Guest Speaker 3m55s

Because with the current amount of satellites and four gs that's in space, listeners know that, you can't do VONOR or in four g Vaulty. Just doesn't work. The budgets are simply not there. With v threes and more satellites, different story.

Roger Entner 4m13s

So it should be interesting. We'll keep monitoring it, but certainly the chess pieces are moving on the board, I guess, I would say. Right?

Guest Speaker 4m20s

Yeah. Absolutely.

Roger Entner 4m22s

And then we also wanna talk about Deutsche Telekom had their first AI Investor Day.

Guest Speaker 4m27s

Yeah. Correct. It's the first telco that had an Investor Day. By the way, as a segue between the satellite and this, I think T Mobile's t satellite removed the Starlink mention from the service, which I thought was interesting. So here, Deutsche Telekom, they spent an entire day, which if you want to follow it, I think it's still up on YouTube, where you can follow all of that vision.

Guest Speaker 4m55s

They spoke very elegantly about it. They have their own AI data center with 15 I saw it somewhere 15 megawatts, like 10,000 sites. For Germany, it's a huge deal. In The US, it would not even show up as a footnote in terms of size of that. They wanna expand it and go to like a hundred and three hundred megawatts.

Guest Speaker 5m17s

Still, American circumstances, quite cute, but not threatening. For Germany, it's massive.

Roger Entner 5m25s

Here we talk about gigawatts, not megawatts.

Guest Speaker 5m27s

Yeah. Here we talk about gigawatts. We talk about 10 gigawatts. It's like 30 times of what they wanna do. And it's getting deployed on a on a regular basis.

Guest Speaker 5m36s

But what was very interesting, Deutsche Telekom had also three of T Mobile USA's executives come over and speak to them what they're doing here. John Fryer, Jeff Simon, and John Saw. That was quite illuminating. John announced that they want to reduce human handled customer care calls by 75 by the end of next year. And they already have reduced this by 55%.

Guest Speaker 6m9s

And AI agents are now handling 40% of customer contact. And the star basically here is what they have called IntentCX. They have a close partnership with OpenAI. And so they are building more and more here. And it integrates all with the TLIFE app.

Guest Speaker 6m29s

We've talked about that Srini Gopala and the CEO is a process optimizer, is an innovator who does drive a lot of profits to the bottom line through that. And I think here we are seeing some of that and how it all plays out. And so as of October 1, you have to go through the T Life app, wherever you interact with T Mobile. And so this is all of that. And then John Shaw talked more about self organizing network capabilities, and he talked again about the live translation service.

Guest Speaker 7m5s

One of the things that we still have and waiting for this to go when they go live, we interviewed more than 25,000 people about live translation.

Roger Entner 7m16s

Just a few people, just a few people.

Guest Speaker 7m18s

Just a few people, right? And just because we can. We put it in our mobile survey, we put it in our home internet survey, we put it in our AI survey, we put it in our business survey, we put it in our airline survey, did I forget one?

Roger Entner 7m33s

We have financial services as well.

Guest Speaker 7m34s

I don't think we put it in the financial services one. I think that one wasn't up at that time when it first came out. But we looked at the live translation service from every different angle of how it would impact. And some of the findings are quite interesting. So we're waiting for this to go live, and then we're gonna publish quite a few things about it.

Guest Speaker 7m55s

But yeah, it's very, very interesting to see how they are doing it. They also talked about physical AI as the big next frontier. And Chris Sambar, he's running T Mobile for Business. One of his explicit remits is physical AI. You see very interesting ways of how the DT and Deutsche Telekom initiatives are coming together around AI.

Roger Entner 8m26s

It's gonna be interesting. Right? I mean, one of the things that we've been looking at is, you know, some of these autonomous agents. The carriers are driving people towards agent based care or AI care. And then on the consumer side, we also are seeing people using things like Instinct or Muse or GrockBot to go in and try and renegotiate their plans as well.

Roger Entner 8m47s

Right? So it's like AIs versus AIs. Right? At some point, you know, there may just not be a human in the loop at all. And, you know, on one hand, you can save your cost of care by, you know, putting people through the AI workflow.

Roger Entner 8m59s

But then those sorts can also push back and, you know, remove some of the barriers to switching presumably, or at least doing price comparison and renegotiation of rates and things like that. On the consumer side, I just wrote something for that that will release soon as well in terms of the implications for carriers.

Guest Speaker 9m14s

A lot of that, the bot stuff, is concerning for companies like Planet Fitness. Right? Where you have a clear disuse model where people sign up because of New Year, everybody's in the gym on January, and by March nobody's left, and then they forget this. The quote unquote inefficiencies in mobile and in home internet are much harder for AI to overcome because they come with a psychological dimension that AI is not able to overcome. Right?

Guest Speaker 9m48s

Why do people have unlimited plans? Because they like to have a predictable bill. If they can have a predictable bill that's lower, sure. But there are already tons of bill optimizing softwares out there where you can do this. Or for home Internet, do you really need to have a gigabit of speed?

Guest Speaker 10m8s

No. We have a whole lot of things in 2027 to talk about this. What does speed really matter? On the other hand, marketing, how can you argue that faster isn't better? You can.

Guest Speaker 10m24s

And on paper, you're right. But that's like arguing with me that I shouldn't eat candy. On paper, you are right. In reality, it doesn't matter. I'm still eating candy.

Roger Entner 10m35s

Yeah. I mean, I I mean, I would say that our data and others data shows churn is still a thing. Right? People still switch. Right?

Roger Entner 10m42s

And the number one driver of churn is price. Right? We also know that while the cost of everything has gone up recently, the cost of wireless service we are seeing in some cases go up as well, although much slower than inflation. Right? So I think if you put those two things together compared with network parity in a lot of situations, There's a use case for some of these agents, but I I agree with you that some people are gonna decide it's not worth it.

Roger Entner 11m7s

Some people may.

Guest Speaker 11m8s

I'm not afraid for telecom. A customer service minute costs 2 or $3. It adds up, and then you have an hour with them on the phone, you know, that $60.80 dollars, that's the profit for several months. So it will be very interesting. But we're definitely looking at this very, very closely.

Roger Entner 11m26s

All right. We'll talk next Okay.

Guest Speaker 11m28s

Talk to you next week.