TECHnalysis Research Blog

July 30, 2019
T-Mobile, Sprint and Dish: It’s All about 5G

By Bob O'Donnell

The US telco industry has seen its share of upheavals and evolutions over the last few years, but one of the biggest potential changes got kickstarted late last week when the US Dept. of Justice finally gave the green light to the long-awaited proposed $26.5B merger between T-Mobile and Sprint. Ironically, it took the introduction of Dish Network—a company best-known as a satellite TV provider, but one that has had its eye on being a more general-purpose service provider for some time now—to get the deal over the final hump of federal regulatory approval. (An antitrust lawsuit backed by several state attorneys general could still end up blocking the final merger, but the DoJ approval is widely seen as a strong argument for its completion.)

A tremendous amount of ink has already been spilt (or should I say, pixels rendered) discussing the whats and wherefores of the proposed merger, but in the end, it seems the most critical factor is 5G and what it will mean to the future of connectivity. Sure, there are arguments to be made about how our individual cellphone plan pricing may change or what services may or may not be offered, but those are all short-term issues. Strategically, it’s clear that the future of not just the mobile wireless industry, but connectivity in general, is increasingly tied to 5G.

In the near-term, of course, lots of people and companies are interested in building out 5G-capable networks, as well as devices that connect to them and services that can leverage them. That is indeed a huge task and something that’s going to take years to complete. Not surprisingly, some of the most compelling arguments for the merger—as well as for the new fourth 5G-capable network that Dish is now on the hook to complete—were around 5G-compatible spectrum, or frequency holdings, that each of the new entities would have if the deal was to go through.

Specifically, the new T-Mobile would gain a large chunk of Sprint’s mid-band, 2.5 GHz range frequencies (a subset of the larger group known as sub-6), which many have argued is an important middle ground for 5G. AT&T and Verizon have focused their early 5G efforts on millimeter wave frequencies (around 39 GHz for each of them), which offers extremely fast speeds, but extremely short range, and essentially only works outside (or near an interior mounted, millimeter wave small cell access point). T-Mobile, on the other hand, initially plans to launch with 600 MHz frequencies, which is on the bottom end of the sub-6 frequency range and offers significantly wider coverage—but at speeds that aren’t likely to be much faster (if even as fast) as some of fastest 4G LTE coverage now available. The Sprint frequencies will allow the “new” T-Mobile to also offer faster download speeds at 2.5 GHz, rounding out their 5G offering. (T-Mobile has also separately announced plans to add millimeter wave at a later date, just as AT&T and Verizon have committed to bring sub-6 frequencies into their 5G offerings sometime in 2020.) Dish, the mobile carrier, for its part, will be able to leverage some existing spectrum it already owns in the 1.7-2.1 GHz range, as well as use some of the 800 MHz frequency that Sprint was forced to sell to Dish as part of the deal. All of it fits into the sub-6 category of spectrum, but the combination should allow Dish to create a 5G network with both good coverage and decent performance.

The one interesting twist on the mobile wireless side is that 5G heavily leverages existing 4G infrastructure investments, and in fact, 4G LTE service is getting better and faster as 5G is being deployed. As a result, the 5G buildout will, ironically, lengthen the usable lifetime of 4G LTE technology, as well as devices that use it—particularly those equipped with LTE Advanced capabilities and some of the spectrum sharing and compression technologies like 256 QAM, 4x4 MIMO (Multiple Input, Multiple Output), and carrier aggregation. Toss in technologies like Dynamic Spectrum Sharing (DSS), which in the world of 5G mobile infrastructure was pioneered by Ericsson and allows telcos with the appropriate equipment to share 4G and 5G spectrum, and the transition from 4G to 5G in mobile wireless should be very seamless (and almost invisible).

However, there’s more to 5G than mobile wireless, and that’s where things start to get really interesting. First, there are some very interesting options for building private 5G networks that companies could leverage across campus sites, or inside large manufacturing buildings, and essentially replace their WiFi network. While no one expects WiFi to completely go away, there are some very intriguing opportunities for network equipment makers and carriers to address this market because of the faster transfer speeds, higher levels of security, and the decrease in manageability costs that private 5G could provide versus WiFi.

There’s also the opportunity to replace broadband network connections and even supplement or replace WiFi in our homes as well. As in the business world, WiFi isn’t going to go away overnight in the consumer world (there are just too many WiFi devices that we already have in place), but it’s already possible to get 5G connections (heck, even some of the new 4G LTE Advanced networks—like AT&T’s confusingly labelled 5Ge) that are faster than a lot of home WiFi. Think of the potential convenience both at work and at home of not having to worry about two different types of wireless connections, but instead connecting everything through a single wireless broadband connection like 5G. In the future, it could be a very intriguing possibility.

Above and beyond the pure network “pipes” discussion, 5G also potentially enables a host of new services through technologies like network slicing. Essentially a form of virtualized or software-defined networks, network slicing will allow carriers to do things like provide a combination of different services to different companies or even individuals with a guaranteed quality of service, and much more. Innovative companies are likely to dream up interesting ways to package together existing services like streaming video and music, along with lots of other things that we haven’t even thought of yet to take advantage of the opportunities that network slicing could create.

The bottom line is that the transition to 5G opens up a world of interesting possibilities that go well beyond the level of competition for our current cellphone plans. In the short term, as we start to see the first real-world deployments and 5G-capable devices come to life, we’re bound to see some frustrations and challenges with the early implementations of the technology. Strategically and longer term, however, there’s no question that we’re on the cusp of an exciting new era. As a result, big changes, like the T-Mobile-Sprint merger and the launch of Dish as a new fourth US carrier, are likely only the beginning of some large, industry-shifting events that will be impacting not just the tech industry, but modern society, for some time to come.

Here's a link to the column: https://techpinions.com/t-mobile-sprint-and-dish-its-all-about-5g/57351

Bob O’Donnell is the president and chief analyst of TECHnalysis Research, LLC a market research firm that provides strategic consulting and market research services to the technology industry and professional financial community. You can follow him on Twitter @bobodtech.