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 seventeenth episode of the week with Roger, 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 doing, Roger?

0m22s Speaker 1

Hey. I'm great.

0m23s Speaker 0

So, Roger, this week, we're joined by one of our fellow analysts here at Recon, Darrell Schuler. Darrell's here to tell us about an analyst event with ZTE, uh, in Istanbul that he just got back from. How are doing, Darrell?

0m35s Speaker 1

Thank you. Thank you for

0m36s Speaker 2

having me on the podcast today. Yes. I just returned from ZTE conference that they held in Istanbul at the Siragan Palace. Lovely venue. I sort of can say, you know, ZTE does a really good job in putting on their conferences in terms of not only running it, the time management, which I think is really important in a lot of conferences and people don't think about, but also in terms of the content itself and how they split it out.

1m1s Speaker 2

So the first day, to be clear, was what they call their five g user conference, which most of the audience and I say overall because it's across multiple floors within the palace. There was probably 500 or more attendees. First day was mainly for operators. So instead of really speaking much themselves other than talking to some about their strategy, A lot of it was hearing from other operators in terms of what they're doing and what their plans are, and then also some higher scale just kind of looking at what's going on in the industry. Second day was really geared towards analysts such as ourselves where they did more of a deep dive in terms of what they are offering to their communication service provider partners on mobile solutions.

1m45s Speaker 1

Well, I'm jealous. As you should be, Roger. We go to pretty cool events here in The US. You know, we were at the five gs Americas event in Dallas, but I don't think it compares to a palace. You know, they're putting together really cool events.

2m0s Speaker 1

Do you think it makes a difference?

2m2s Speaker 2

Yes, absolutely. I mean, one, certainly it helps to attract people. But two, the other part about the cool event isn't really just the location. Again, it's how they run it to keep people engaged, which I think is important. And the way they kind of tailor make the information based on the audience so you get the maximum results or return on your investment of time.

2m25s Speaker 2

Because this is clearly an investment of time to go all the way there.

2m28s Speaker 1

All the way to Turkey. Right? It's like from where you were, like, fifteen hour flight, something like that.

2m34s Speaker 2

I should be so lucky. It was fifteen hours.

2m36s Speaker 1

So what did you learn?

2m38s Speaker 2

One the things I do appreciate about this, say, versus maybe five g America is that this is really a global view, what's going on. So it kinda shows some things that, you know, I don't normally see here in The United States. So I would say from the first day, obviously, some big topics. A lot of people are talking about how they can use AI, but, generally, all of it is very theoretical still at this time. Second thing, honestly, globally, things are still just tough in this market.

3m5s Speaker 2

It's still a challenge for the vendors. Operators themselves are still challenged. And there was also a refreshing that I realized, you know, they talk about how many operators out there still don't even have a five g network up yet. Because here in The United States, we think of five g is everywhere. But once you get outside of this country, it is not globally available to everybody else.

3m26s Speaker 2

So it certainly was a good reminder there on that part of it.

3m29s Speaker 0

But I would say, overall, a lot of

3m30s Speaker 2

the focus was really about, again, how can an operator move from its current state of, you know, a traditional telco to being more of a techno? AI is important, but AI is just part of an overall corporate culture and part of a holistic solution in terms of AI is good, but what are the other parts you have in there as well? And they kinda left us with, up to the first day, four points to think about. They said they think it's important to be successful in this type of telco to techno journey. One, you have to be open to collaborate and partners.

4m4s Speaker 2

Two, you have to clearly define what it is you are as a company and what you want to be as a company. Three, you need data and good data to guide and support your decisions. And four, whatever it is you eventually decide on, you better make sure it's sustainable and repeatable. And by sustainable, they're not talking about ESG goals. They're talking about the actual service itself that you don't wanna be stuck with a bunch of bespoke type services or things that don't scale.

4m33s Speaker 2

You want something that you can scale, that you can repeat. So that was, I thought, a really good way to kind of sum up the first day. And then the second day was really more about ZTE themselves, which I do give them credit for the fact that they don't spend the entire conference just talking about themselves, that they're really interested in creating a conversation of the whole ecosystem. And the second day, a lot of it was around their portfolio and what they're doing. And while we like to talk a lot about value add services, especially on the enterprise side, and they do talk about that in terms of trying to grow, A lot of their current focus really now is about making operators optimize their processes, lowering their cost of doing business, especially, say, at the radio access level in terms of simplifying the deployment at the mast.

5m24s Speaker 2

Instead of having one radio for every band, have one radio for three bands or one radio for three sectors to lower that cost. We're talking about the work they're doing with semiconductors to lower energy cost as well. So they really focus a lot on how to help operators increase capacity and to do it effectively at the best total cost of ownership, which I believe matches up well with our own conversations and research that we've done here as well with the CSPs.

5m53s Speaker 1

So can you remind or tell our clients where CT is actually operating? They're a Chinese infrastructure provider, which means they're not operating in The US. No. Because of national security reasons. Other countries don't have the same sensitivity and same urgency that The US has, considering our relationship with China.

6m19s Speaker 1

You know, maybe others prioritize price probably or other capabilities over that. Where are they mostly active?

6m26s Speaker 2

From a revenue perspective, I believe for infrastructure, still 50% of it comes from the domestic market, which isn't surprising given the size of the domestic market itself. But outside of that, they're still very active in Central And Southeast Asia, so they do a lot of business in Thailand, for example. They are also busy in Central America and South America, including Mexico, Ecuador, Africa as well. Turkey, of course, they work with the major operators there in Turkey and other countries within that kind of Central Asia, Eastern Europe footprint. So they still are very active even though they're not active here in The United States or Canada.

7m11s Speaker 1

Oh,

7m11s Speaker 2

yeah. They didn't really go with their financials that much. I do believe as a whole, though, obviously, they're struggling just like most of the other vendors throughout the world. Not as bad as some, better than others.

7m22s Speaker 1

Yep. Well, the the domestic market should insulate them quite significantly. So it will be very interesting to see how, you know, the more established providers like Ericsson, Nokia are responding to that and to these innovations. What do you expect there to happen?

7m43s Speaker 2

From their perspective, obviously, price point is important, but I think a lot of the conversation has shifted over to total cost of ownership. So it's not just the cost of the equipment, but it's how much does it cost you over the life of the service. So I think that's definitely a big point for them to play up in terms of energy savings, site rental savings, things of that nature. Obviously, using their strengths in terms of services to help operators think about, you know, how do you put the network together, you know, maintain the network, thinking about, you know, not just what you deploy today, but what you plan to do with it over the next ten years. Certainly an important way for them to compete as well.

8m23s Speaker 2

And you have seen, you know, success say in India with them. So Ericsson and Nokia definitely do have proof points that they're good partners in those regions of the world and understand some of the different economic dynamics say in the market like India versus The United States or even Western Europe.

8m40s Speaker 1

In our conversation before we started the recording, we talked about how it was encouraging and satisfying to see that some of the findings that we saw in in our operator survey come through loud and clear at this event.

9m0s Speaker 2

Yes. When looking at the solutions that ZTE is selling, they are really pushing more capacity. Again, like, you know, carrier aggregation, improvements in MIMO, especially, say, cell edge interference. Basically, you know, they're they give an indication that's what's still really driving a lot of the market. Even with five g advanced, operators that don't deploy SA can still take advantage of other five g advanced improvements when it comes to the capacity side.

9m30s Speaker 2

And that still seems to be the big driver for a lot of it because a lot of the business as we know is still consumer and enhanced mobile broadband, which is really about capacity. Like they said, yeah, I mean, this fit in with what we saw this time last year as well when we surveyed operators across the world when we asked them, like, what's the biggest advantage of five g, five g advance, and what do you want from six g? Primarily, everybody came back and talked about something that improved network capacity. Or if it wasn't network capacity, something that made it easier to deploy five g to begin with. And ZTE is definitely focused on that.

10m4s Speaker 1

Yeah, and, you know, operators around the world are putting their money where their mouth is, and they're investing in improving capacity. You know, I know some people out there are saying, oh, you know, why do we need more spectrum? Why do we need more capacity? Well, we need more capacity because data consumption is continuing to go up. There isn't an end in sight, really, other than in, I think, some European markets that are technically anyway not that aggressive with new technologies.

10m40s Speaker 1

And so here, the vendors and a lot of the operators around the world are using more technology, better technology, that uses spectrum more effectively, as they sometimes don't have access to more. So it's a dual pronged approach. We're improving technology to get higher spectral efficiency and a better use of spectrum, but that doesn't alleviate the need for more spectrum.

11m5s Speaker 2

Yeah. You're absolutely correct. I mean, one of the big things, and this is something ZT's been talking about a lot for a while, is also doing massive MIMO in the FDD bands, specifically those between the one and two gigahertz space for that exact reason that you brought up, that in a lot of areas, spectrum has not been released. And so operators are looking for whether they're on LTE now and wanna move to five g or at five g now. Like, how do you maximize what you have left?

11m29s Speaker 2

If they don't see a runway towards more spectrum, how do you squeeze more bits into what you have?

11m35s Speaker 1

Yeah, interesting times. We'll see how it plays out here in The US, not for CTE, but for spectrum, right? Right. We had an election and elections have consequences. And we'll see how the gridlock on Capitol Hill and inside the Beltway in general around more spectrum and spectrum authorization, how that will resolve itself.

11m58s Speaker 1

That's a topic for another day.

12m0s Speaker 2

Yeah. That's definitely a global thing. I mean, one of the things I like from these types of events, know, you see that some of the business models and challenges operators have outside The US are different than what we have in The US. I mean, there's more price sensitivity, a lot more prepaid. So there's definitely some room on the consumer side for some value add that I think is difficult to do here.

12m20s Speaker 2

But one universal thing is spectrum. Everybody wants to love it.

12m24s Speaker 1

Yeah. Alright. Good.

12m26s Speaker 0

Alright. Thanks, Daryl, for coming on the podcast. Roger, we'll talk to you next week.

12m30s Speaker 1

Thank you. Thank you. Bye.