T-Mobile's Carter: It's a 'myth' that Sprint needs to fail for us to succeed
by Phil Goldstein |
T-Mobile US (NYSE:TMUS) CFO Braxton Carter said he does not think that rival Sprint (NYSE: S) needs to fail in order for his company to succeed in the market, arguing that they are both training their sights on market leaders Verizon Wireless (NYSE: VZ) and AT&T Mobility (NYSE: T).
Carter said that a "common myth" has emerged in the industry that "Sprint has to fail in order for T-Mobile to be successful. Contrary to popular belief, the vast majority of our flow is coming from AT&T and Verizon." The T-Mobile finance chief, speaking at the Wells Fargo Technology, Media & Telecom Conference, said that most of the company's recent subscriber additions coming from other carriers have been prime credit customers of Verizon and AT&T.
That's not to say that T-Mobile is discounting Sprint entirely (T-Mobile CEO John Legere has made it his stated goal to pass Sprint in terms of total wireless customers). Carter said T-Mobile has "definitely been watching" what Sprint under new CEO Marcelo Claure has been doing to revamp its pricing to become more competitive, calling the changes "refreshing."
Yet he said that Sprint's "opportunity isn't T-Mobile. Their opportunity is the duopoly." At the same time, Carter said that "the challenge Sprint is going to have is the whole network part of the equation." Carter said he thinks that over the next few quarters Sprint will continue to iron out and improve its network, but that it will remain a challenge for Sprint as it seeks to grow its own market share.
Claure, who spoke earlier at the Wells Fargo conference, said Sprint is going to expand its 800 MHz LTE deployment to improve coverage, and will target its 2.5 GHz LTE deployment in key markets to boost capacity. Claure said that Sprint customers are leaving not because Sprint is not deploying 35 Mbps LTE, but because they are dropping calls or can't initiate a data session. "You can affect churn significantly if you are able to meet the basics," he said.
Carter boasted that T-Mobile is providing the fastest LTE network in the country right now. The company said in its third-quarter earnings presentation that, based on its analysis of crowd-sourced LTE downlink speeds, in the third quarter T-Mobile's average LTE download speed was 18.8 Mbps--compared with Verizon at 16.8 Mbps, AT&T at 14.3 Mbps, and Sprint at 9.6 Mbps. "We think speed is super important," Carter said, as more customers get LTE smartphones and use more data.
Carter praised T-Mobile CTO Neville Ray and the job he has done constructing T-Mobile's LTE network. "I think Neville is one of the happiest CTOs in the industry. He is having the time of his life."
T-Mobile now has 20 markets with LTE deployments of 15x15 MHz or greater, what it calls "Wideband LTE." The company aims to have 26 such markets by year-end. Carter also noted that five years ago T-Mobile started laying the foundation for fiber connections to T-Mobile's cell sites. Currently, Carter said, T-Mobile has fiber backhaul connections to 50,000 of its sites, out of 60,000 total sites. That decreases costs and allows for more data usage on the network, he said.
Carter also noted that T-Mobile has now shut down MetroPCS' legacy CDMA network in Philadelphia and launched Wideband LTE there. He said T-Mobile is going to shut down more legacy MetroPCS CDMA networks in other markets before the end of the year and will have all of that gear shut down by the end of 2015.
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Phil Goldstein