The Week in 5G: 7/30/2019 — Sprint / T-Mobile Merger Green-Lit By Regulators, France Looks To Avoid Spectrum Auction Inflation
By Ed Biller
Sprint and T-Mobile’s proposed merger passed its final regulatory hurdle this week as the U.S. Department of Justice (DOJ) gave its blessing for the deal to continue, with a few caveats. The U.S. Federal Communications Commission (FCC), whose thumbs-up also was required, approved the deal in May.
Per an Axios report, DOJ’s conditions on the deal include direction for Sprint to sell its prepaid brands (Boost, Virgin and Sprint Prepaid) to Dish Network, make about 20,000 cell sites available to Dish, and hand over some spectrum in the 800 MHz range to Dish. Further, The combined entity has to give Dish “robust access” to T-Mobile’s network for at least the next seven years while also negotiating to lease some of Dish's existing 600 MHz spectrum.
Dish has been scooping up spectrum for years, and this final boost may be the push the company needs to build and launch its own 5G network by late 2020, Dish Network Chairman Charlie Ergen told Axios.
T-Mobile CEO John Legere wasted no time in trumpeting the combined entity’s place at the top of the (cell) tower of 5G dominance.
“Legere believes 5G requires low-band, mid-band, and high-band spectrum in order to work, and the combined T-Mobile is the only carrier that has access to all that,” writes Jacob Kastrenakes for The Verge.
Heidi Hemmer, Verizon’s VP of network and technology, countered that Verizon will have a “multi-spectrum strategy,” according to a report by The Verge.
AT&T, meanwhile, is focusing on 5G use cases, announcing Tuesday that the company is developing -- alongside Badger Technologies -- autonomous 5G robots to place in its retail stores. According to CNET, the robots "would identify any out-of-stock, mispriced or misplaced products in a store, as well as finding store hazards."
Still, Will Townsend, a Moor Insights & Strategy senior analyst covering networking infrastructure and carrier services, concurred with Legere that Sprint/T-Mobile is -- for now -- ahead of its competitors. “I firmly believe the combined company will deliver a balanced mix of both consumer and enterprise 5G services,” Townsend wrote in Forbes.
On the consumer side, he cited as areas of strength the carriers’ partnership with Hatch Cloud Gaming and T-Mobile’s acquisition of Layer3 TV (now TVision Home). At the enterprise end of the spectrum, Sprint’s “Curiosity” IoT network and “solutions in a box” marketplace, as well as its SD-WAN solutions, put it ahead of runner-up Verizon on the global carrier leaderboard, Townsend writes.
In technology news, Huawei’s first 5G phone is expected to go on sale in China next month, reports TechCrunch. The Mate 20 X is available for pre-order and should launch in China on Aug. 16.
Apple likely will respond to its competitors’ accelerated technology and network rollout schedules by enabling all three of its 2020 model iPhones to support 5G, stated TF Securities analyst Ming-Chi Kuo, per a CNBC report.
The French government and telecom regulator Arcep are looking to avoid spectrum auction woes that have complicated 5G rollouts in Germany and Italy, said carrier Orange’s Deputy CEO and Group Chief Financial and Strategy Officer during a call with investors. Arcep has launched a public consultation on its draft procedure for awarding frequency licenses in the 3.4-3.8 GHz band, which will run through Sept. 4, 2019.
According to an RCR Wireless report, the Italian government raised €6.55 billion ($7.29 billion) in October, while the German government raised €6.5 billion ($7.23 billion) in its spectrum auction that ended in June. Carriers and critics in both nations contend that the hyperinflation of spectrum pricing has crippled carriers’ ability to expand their networks.
According to a report by Livemint, carriers in India are likely to encounter similar pricing obstacles.
“India's reserve price of $70 million per MHz is ‘expensive,’ and will force Vodafone Idea and Bharti Airtel to participate in 5G spectrum auctions in a ‘limited’ way, global rating agency Fitch said on Monday,” reports Livemint. The coming auction will cover the 3,300-3,600 MHz spectrum band.
The GSMA (Global System for Mobile Communications Association), which represents 750 operators and 350 mobile industry firms, also is clamoring for increased access to high-capacity spectrum. The organization claims such spectrum access -- from 26 GHz and up -- is critical to support 5G services, and accuses satellite operators, NASA, and the ESA of hoarding spectrum they don't need.
Finally, don’t look for mobile 5G to steal market share away from in-home, wired internet connections any time soon. While the number of wireless-only consumers has grown slightly in recent years, companies like Verizon and many of its competitors have a vested interest in consumers who purchase wireless services and in-home internet as separate services, writes Mike Dano of Light Reading.
Further, he adds, wireless services simply can’t keep up with consumers’ data demands — at least not yet.