T-Mobile’s Business Push, Technology Advantages, and 5G Slicing with Daryl Schoolar

Full Transcript

0m10s Speaker 0

Hello, and welcome to the two hundred and fifty second episode of the week with Roger, a conversation between analysts about all things telecom, media, and technology by Recon Analytics. I'm Don Kellogg, and with me as always is Roger Antner. How are you doing, Roger?

0m23s Speaker 1

Hey. I'm great. Excited.

0m25s Speaker 0

Yeah. So we've got some news about UScellular. Might actually be the last time we talk about UScellular.

0m32s Speaker 1

No. We will continue to talk about them even though in a different shape and form. Right? The DOJ basically gave approval to the acquisition of large parts of US cellular spectrum and the customer operations of the company. And so as a brand, this is kind of the end of the road.

0m56s Speaker 1

There's still wireless spectrum to be bought. There are still cell sites to be bought. Right? And so, you know, I always tell the story that like my first CTIA dinner, I was chatting with The US cellular people and I was like, you you guys are dead men walking. How many years ago was this?

1m15s Speaker 1

About twenty five. Twenty five years ago, yep. And they were laughing in my face and it's like, we're not dead, you know. You're gonna be out of this industry before we are out of the industry. So in a way, we were both wrong, right?

1m29s Speaker 1

They're out of the industry before I'm out of the industry. But they lived a lot longer than I thought. And that was like the end of me being a spreadsheet jockey that just looks at only the numbers, but I look at the people who make the decisions. And in US Cellular's cases, that is the Carlson family that has control over 80% of US Cellular by owning a little bit more than half of TDS or somewhere in that neighborhood, right? And so when you look at they had some deaths and things like that, also the family had changes in who runs the thing.

2m1s Speaker 1

And when you have changes, just like with elections, elections have consequences, so do deaths in the family, especially for the one who dies. Anyway, when you look at UScellular over the last twenty five years, they successively have withdrawn from competition. They had like licenses in Florida. And they sold it because, oh my god, we have to compete against AT and T and Verizon. And at that time,

2m26s Speaker 0

it was a week. Well, they used to have Chicago too.

2m28s Speaker 1

And then they had Chicago yeah. I got to there. First, they sold, like, Florida and I think some markets in Texas. This is, twenty years ago. Right?

2m37s Speaker 1

They also owned Chicago, and I think like ten years ago or so, they also sold Chicago. And that's where the headquarters was like in the top two or three levels. You and I have been there. I think you have been to that headquarters more than I have. I've been there once.

2m53s Speaker 1

And they were like at the top two or three floors of this relatively nondescript business office building. Yep. Not ostentatious at all. Like really

3m3s Speaker 0

It's pretty low key.

3m4s Speaker 1

Pretty low key. That's a good word. Right? And so they sold this. So you kind of saw it because in essence, US Cellular, The US for them became like Kansas and Wisconsin.

3m15s Speaker 1

In my head, it was always like, you're not US Cellular, you're Kansas and Wisconsin Cellular.

3m20s Speaker 0

Well, and they also specialize in rural areas. Right? Like, had a bunch of coverage in Maine and, like, kind of out in the sticks in, like, Northern California. Yeah. Not large metros, but, like, you know, on the fringes type areas.

3m33s Speaker 1

They ran away to the most remote parts of the country where there was no competition until there was competition, right? So Verizon, AT and T, and now T Mobile are coming. And they're like, okay, you know, they kind of tapped out. Like, you know, MMA, they tapped out. And they tapped out quite a while ago and nobody wanted to buy them.

3m55s Speaker 1

Why nobody wanted to buy them was

3m58s Speaker 0

Nobody wanted to buy them whole.

4m0s Speaker 1

Right? Nobody yes. Nobody wanted to buy them whole because they all figured, at least under the Democratic administration, the spectrum part the subscriber part is irrelevant in a way, kinda. But the spectrum part would trigger a lawsuit from DOJ. And so nobody wanted to buy it.

4m19s Speaker 1

Then finally, I think they got around and said like, okay, we also are willing to be sold in pieces. And T Mobile was the first to bite. And they were like, Okay, we buy these licenses in about one third of the country because these are the pieces where it fits into our need. It will not trigger the FCC and the DOJ. And again, the DOJ with these things we always talk about the FCC, but the FCC does what the DOJ says.

4m50s Speaker 1

And if the DOJ approves it, the FCC will approve it. And if the DOJ objects, so will the FCC. So the FCC is like the sidekick here, even though it gets all the headlines. Anyway, T Mobile was like, we'll buy these filet pieces that fit into our puzzle, or we'll take the puzzle pieces that fit into our puzzle, and we'll buy your customers, and we'll buy a certain number of towers, and that's it. Right?

5m18s Speaker 1

And then I think Verizon bought some spectrum, and I think everybody's waiting for AT and T to buy some spectrum from this. This is now the part of the T Mobile, the customers, and some towers. And so the Rump UScellular, it's basically a tower company with still some spectrum. And I would expect that part to roll up to be bought by a tower company at one point in time, either whole or in pieces, and the spectrum to be bought by AT and T or whoever. Like in bits and pieces, think they have to see who is in the FCC, can we buy this or not?

5m56s Speaker 1

That's what it is. And so in a way, it's a big part. There may be like still twenty, thirty small rural telcos left.

6m4s Speaker 0

But I mean, realistically, they were the largest regional carrier, if you wanna kinda characterize them.

6m8s Speaker 1

They were the largest regional carrier. That crown now goes to Seaspire, which is a large wireless carrier in Mississippi. So congratulations. Mississippi is in something now number one where they usually are. Everything number of, like, 49 or 50.

6m28s Speaker 1

Right? Income, education.

6m29s Speaker 0

Be nice to Mississippi, but, yes, cease fire is.

6m32s Speaker 1

Well, the facts are not nice to Mississippi. I'm sure Mississippi is a wonderful state and wonderful people. Only the best people, right? They are so wonderful, they have Confederate Remembrance Month. Okay, enough said.

6m45s Speaker 1

Anyway, so we've seen this movie before, right, of rural consolidation. We're now in the end pieces. What we are also seeing is the beginning of rural consolidation for the rural wireline telcos, both in copper and in fiber. So since we have seen this movie before, we know how this ends. And Don, you and I have built this awesome platform.

7m10s Speaker 1

We now have more customer information on anybody, even the long tail. You burnt the midnight oil. So what do we have in rural? How far can we go down?

7m20s Speaker 0

Yeah, over the last two and a half years, you know, we've talked to over 1,200,000 survey respondents. And when somebody goes through our flow, we ask about obviously your wireless provider, but we also ask everybody about their ISP as well. And we allow for fill ins. So we marry that data to the FCC data in terms of who covers where. And then we actually use AI to go build out the long tail.

7m45s Speaker 0

And so we're able to classify over 1,300 ISPs in The US. And we have relevant statistically stable sample size for over a 150 of those, right? So we can go down to very small regional ISPs and nobody else has a skip.

8m4s Speaker 1

And tell them more about themselves than they know that. I showed some of these data points and I actually showed some of it to Frontier. And the lady I talked with with Frontier, one of their vice presidents, she said like, you know more about our customer base than our own people. Because I said like here, right? And now we're building basically reports.

8m27s Speaker 1

I'm pretty far down for like the 25 largest small ones. But that means like down to about 35,000 subscribers, like 120,000 passings. So that's where I am right now writing reports that we will sell for bits and pieces. Like that's our long tail, basically. We're going to write reports about all of these small rural telcos, strengths, weaknesses, strategy, where this end, who is the most likely buyer for this, where does it fit the best, their strategy around should they expand it to fiber, should they spin it out, should they sell one, How do they best get rid of copper, which is like having cooties, right?

9m9s Speaker 0

I don't know. If the copper tariffs keep on coming, all that copper in the ground might be worth a little bit more money than it used to be.

9m15s Speaker 1

Yeah, but the local regulator is a little bit upset when you rip out the copper to sell wholesale because they're also the carrier of last resort. So it might get more profitable to sell the copper. But for all these providers, we can provide their NPS and their competitors' NPS. We can run this

9m33s Speaker 0

In their footprint too, right?

9m34s Speaker 1

In their footprint. Right? In their footprint.

9m37s Speaker 0

We're using the the FCC defined footprint to arrive at a customized bespoke, you know, competitive set

9m44s Speaker 1

Yeah.

9m45s Speaker 0

Based on where they operate.

9m46s Speaker 1

We we go, like, down to folks like, I'm on communications, 23,000 passings in Iowa, like really small. And what is the NPS in their footprint against that of their competitors in their footprint? What would be the best strategy to improve? All of that. What's their market share?

10m6s Speaker 1

In some places, we might be able to go down to county level, right? But even with these rules, we probably can tell them this is your market share in your footprint compared to that of everybody else. So we're basically going to facilitate the roll up of all these small rural telcos by providing unprecedented information on each of them. And I'm really, really pumped and excited about that. I'm like giddy with fun.

10m32s Speaker 0

It's really cool data, right?

10m33s Speaker 1

It's really, really cool data. We are bringing light into places where there has been darkness. I always say like everybody can report on AT and T, Verizon, T Mobile. How many can report on LUS fiber or Summit Broadband or Tacos fiber internet? Most people haven't heard about these guys.

10m53s Speaker 1

And we have the goods on them. And we're going to tell. So if you're into a rural roll up and looking at what you do, it's coming. It is coming. So I'm so excited about that.

11m3s Speaker 0

Super exciting work. And it's a combination of all this data we've been collecting for the last two and a half, three years, plus AI, plus just having a real pulse on, you know, kinda what's going on.

11m14s Speaker 1

And so I'm building this on the genius that you really put in there. You know, we built this thing together and, you know, I couldn't have done this without all the hard work and working till midnight and weekends and all of that stuff without you. And it's so exciting and I'm so happy about that.

11m31s Speaker 0

Absolutely. And we'll we'll share more of this as we get further down the road. I think there's some really interesting, amazing tidbits we're digging up here.

11m39s Speaker 1

Yeah. Alright. Awesome. Talk next week. Alright.

11m42s Speaker 1

Bye.