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

Full Transcript

Don Kellogg 0m10s

Hello, and welcome to the two hundred and fourteenth episode of the Week with Roger, conversation between analysts about all things telecom, media, and technology from Econ Analytics. I'm Don Kellogg, and with me as always is Roger Entner. How are doing, Roger?

Roger Entner 0m22s

I'm good. How are you?

Don Kellogg 0m24s

I'm good. So, Roger, it's been a while since we talked Spectrum, and Verizon just bought a pretty big chunk of spectrum from UScellular. I thought we could talk about it. Can you tell us about it?

Roger Entner 0m35s

Yeah, sure. So Verizon bought shocking surprise AWS spectrum, and more importantly, eight fifty MHz spectrum, and PCS spectrum from US cellular for about a billion dollars, which is not that bad, right? They're paying about a buck 44 per megahertz pop. You know, Verizon took here either the fillet pieces from this carcass or they took the missing puzzle pieces that very nicely fit into their structure. Similarly to T Mobile picking from their perspective, the bits and pieces that make sense for them.

Roger Entner 1m26s

Right. UScellular also said that they have interactions or sales with two more operators, and there are not that many network operators around. So you can like, you know, eeny miny. Out of the four

Don Kellogg 1m41s

national operators we've already heard from two, right? So you could probably pass it.

Roger Entner 1m44s

Well, heard from two, you know, who else could it be? You know, number three, AT&T. The fourth one the fourth one just got money, right? So it might be EchoStar. They're changing names so much I have to deduce the new name EchoStar and Boost.

Roger Entner 2m1s

It's no longer DISH, right? Yep. This thing goes over to TPG. So yeah, so it's slowly but surely taking shape.

Don Kellogg 2m11s

Eight fifty spectrum is not easy to come by, right? And it's a good low band spectrum.

Roger Entner 2m16s

You know, it doesn't grow on trees anymore. And it's the baseline for Verizon's network. It has great propagation and

Don Kellogg 2m24s

You put your pilot on it, right?

Roger Entner 2m26s

They probably put the pilot on 700. But you can put it either way, because they have a nationwide license on 700. But yeah, good for US cellular, good for Verizon. You know, now the FCC just has to agree with it. It's very interesting to see the argument that UScellular brings forth of like, you know, cable drove us out of business.

Roger Entner 2m50s

I don't think cable drove them out of business. They drove themselves out of business by moving over the last twenty years away from competition.

Don Kellogg 2m58s

Well, they moved out of the big markets.

Roger Entner 3m0s

They moved out of the big markets. They moved out of the smaller markets, and now they painted themselves in the corner. You know, I don't think too many people will miss them. They made sure of it, and to a certain extent. To me, it's also amazing that TDS, and TDS owns 82% or 83% of US cellular, is largely in the same position, and is also starting to sell stuff because they didn't build fiber early enough, right?

Roger Entner 3m27s

They're stuck with everybody else. And when you look at it, you know, I know it's privately held, but like somebody like Seaspire, privately held company in Mississippi, you know, which is not the economic powerhouse of the country, but they took their wireless revenues and profits and poured it into fiber, and are now a really strong fiber provider in Mississippi with a wireless overbuild, and they're doing really well. To a large extent, I don't think for you to be not a nationwide provider necessarily makes it unviable, but at the same time, your margin of error is smaller.

Don Kellogg 4m7s

Well, mean, the economics of covering more rural areas are more difficult.

Roger Entner 4m11s

Yeah, but you get government subsidies, right? Yeah. There's RDOF, there's BEAT, you name it. It's like almost the government pays like for most of it, right? It's like you don't have to stem this by yourself.

Roger Entner 4m24s

At the same time, you can't stand around with your hands in your pockets and stare, you know, holes into clouds. You got to move.

Don Kellogg 4m31s

It's also, mean, I think against the backdrop of T Mobile making a big push into rural markets.

Roger Entner 4m36s

Yeah. That's much more. I would be much more scared of T Mobile than being scared of people. Right. Right.

Roger Entner 4m43s

Exactly. Right. And I'm not going to take anything away from cable. They are kicking butt and taking names in mobile just like their name has been taken and their butt has been kicked on broadband and continues to be kicked there. Right?

Roger Entner 4m58s

It's like this circle kicking that's going on here. I think it's the joint threat that scares UScellular, which has not been you know the most, I feel like it's like what is it Alice in Wonderland with the lion, right? They're the lion.

Don Kellogg 5m14s

You mean Dorothy with the lion?

Roger Entner 5m16s

Oh, it's Dorothy. Dorothy, Yeah,

Don Kellogg 5m18s

Wizard of Oz, not Alice in Wonderland.

Roger Entner 5m20s

My son is now 23, you know, the fairy tales have moved to the back of my Right. These kids stories have moved to the back of my brain, and felt obviously off a cliff. But yeah. No. It's like the courageous line.

Roger Entner 5m34s

Right?

Don Kellogg 5m34s

Yep. Alright. Well, we'll keep an eye on it. I mean, I think it's interesting within the context of who's grabbing which pieces of USC. Think what Verizon's purchase makes a lot of sense.

Don Kellogg 5m44s

I think what T Mobile purchased makes a lot of sense too.

Roger Entner 5m47s

And it shows that there is demand, right, and that the carriers need more spectrum. Otherwise, they wouldn't spend a billion dollar here, a billion dollar there, and suddenly we're talking about real money, right? Meanwhile, Capitol Hill is crickets based on, you know, what the spectrum pipeline is. I don't think anything will happen this year because, a, it's October, and b, it's election, right? All the decisions will be made by the next Congress.

Roger Entner 6m17s

We'll definitely have a different president than the current one, and we'll have a different Congress, And we'll see what happens then.

Don Kellogg 6m25s

We should do an episode at some point on over under on depending on who who wins, kinda what does that mean for policy. I think that'd be an interesting one for folks.

Roger Entner 6m33s

Yeah. I think we should wait until when the election happens, then it's much clearer.

Don Kellogg 6m37s

Sure.

Roger Entner 6m38s

But, yeah. Absolutely.

Don Kellogg 6m39s

All right. Well, we'll talk to you next week. Thanks, Roger.

Roger Entner 6m42s

Thank you. Bye bye.