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

Full Transcript

0m10s Speaker 0

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

0m23s Speaker 1

I'm good. How are you?

0m24s Speaker 0

Good. We made it to 200.

0m26s Speaker 1

Yeah.

0m27s Speaker 0

So, Roger, T Mobile's getting ready to get rid of some spectrum in the 800 megahertz band. Can you tell us a little bit about this?

0m35s Speaker 1

Yeah. As part of the agreement with the DOJ and the FCC that allowed them to buy Sprint, they had to sell their 800 megahertz spectrum. And Dish had the option to buy it for, what was it, 3,000,000,000 and change, or not to buy it for $72,000,000 This 800 megahertz spectrum is, in most of The United States, seven by seven megahertz, and along the border with Mexico and Canada, three and a half by three and a half. Because this spectrum Nextel got because it successfully convinced the FCC that it was such a horrible company that couldn't do RF management that all the first responders were being in a field with. And as a result, they lost their SMRESMR spectrum, and in exchange they got this back, right?

1m48s Speaker 1

It didn't help Nextel, and I still am not convinced that they actually interfered with the first responders. Anyway, Sprint didn't do anything with it, and T Mobile rightfully didn't have any plans to do with it, because in the modern world, 3.5 by 3.5 or seven by seven doesn't do much. The best thing you can do is you put your pilot on it, or you have some low throughput applications. But today where people talk about gigabits and hundreds of megabits of speed, seven by seven doesn't do deadly. Right?

2m28s Speaker 0

Right. But this is low band spectrum. Right? Which means This

2m31s Speaker 1

is low band spectrum.

2m32s Speaker 0

It's got good propagation characteristics. As you say, you can put your pilot on it. Yep. The other application But doesn't do throughput. Right.

2m41s Speaker 1

And today we're in the throughput world.

2m43s Speaker 0

Well, the carriers are in a throughput world. Right? Yeah. There's speculation that this is the kind of spectrum that might work well for something like a utility running a private network. Yeah.

2m52s Speaker 0

Something of that nature. Right?

2m54s Speaker 1

By the way, you know, a lot of people say like, oh yeah, DISH will buy, DISH will buy. I've always been adamant DISH would be stupid if they would buy it, right? They're better off paying $72,000,000 not to have it than to have it, Right? Because then they would have to build it out and all of these things.

3m13s Speaker 0

Well, they'd be better off spending that money on marketing so they could get some more customers so they could fill up the pipes they already own. Right?

3m20s Speaker 1

They don't need the spectrum. They have like a lot of spectrum in 600 megahertz, which is even better than 800. And they have tens of megahertz there, so why take a sidecar when you can have a real car, right? It doesn't make sense. Anyway, so now T Mobile is stuck with the spectrum, and based on the agreement, they have to get rid of it.

3m44s Speaker 1

So there is an option going to happen, and hopefully somebody will come up with the $3,600,000,000 opening bid. T Mobile says it has interest from utilities and the alike, and utilities have been buying low band spectrum in September, and we'll see.

4m8s Speaker 0

The line we get from the industry over and over again is that we always need more spectrum. But the idea here is that this just doesn't have a big enough chunk for it to really move the needle for the national operators. Exactly. It's an

4m20s Speaker 1

appendix. Even like when Nextel got it, they didn't do anything with it. Because seven by seven doesn't move the needle. And you have to put antennas up, you have to put it in the phones, you have to use battery power to see if there's a signal, and then it doesn't do much in terms of bandwidth. You have to do carrier aggregation, and you can't aggregate two low bands together, right?

4m51s Speaker 1

The six hundred and eight hundred or seven hundred and eight hundred gets really difficult. And so it sucks. Sorry. The utility's running meters on it, but even all the metering contracts are gone. But like network monitoring, like there's some really nifty stuff like San Diego P and G, they are using low band spectrum, and they have like sensors on big transmission poles.

5m22s Speaker 1

When these monitors realize that the cable got like interrupted and broke, or if a tower is falling, they can turn off the power to that transmission line in the time between the thing losing balance or coming down and it hitting the ground, preventing massive wildfires. Their California neighbors, PG and E, different company, you know, they burned down Paradise, literally Paradise, California, but still they burned down Paradise. And so their neighbors to the south, San Diego Power and Electric, found a way out. They cannot be like their northern neighbor, right? And so a lot of utilities have found applications where they can run a couple megahertz, right, which is all they need, and have a much better control over their grid, also known as smart grids.

6m22s Speaker 1

Right? Well, it'll be

6m23s Speaker 0

interesting to see who ends up bidding it for it. You know, obviously, the national carriers are trying to deleverage right now, it doesn't sound like they're particularly interested. I'd love for utility like PG and E to purchase the spectrum. So as you say, they won't burn down Paradise again, but we'll see. Yeah.

6m42s Speaker 1

And some financial analysts seriously think that AT and T and Verizon will buy it. They don't need this either. What they need would be 30 megahertz below three gig, which the FCC was supposed to auction off by July 1 and didn't, violating an act of Congress. Would be much nicer if they would do this. And with 30 megahertz, you can do something, especially if it would be adjacent to the three gig bands, right, either way.

7m15s Speaker 1

But no. It was not to be had.

7m18s Speaker 0

Alright. Well, we'll keep an eye on it. I'm sure we'll do an episode once the results of the auction are live so we can talk about who got what.

7m27s Speaker 1

Yeah. Absolutely. Alright. Talk to you next week. Talk to you.

7m30s Speaker 1

Bye bye.