T-Mobile tackles the hard part about 5G mid-band build

With T-Mobile’s mid-band 5G buildout at 275 million POPs and a year-end target of 300 million POPs, the question is: How easy or difficult is it to cover that last 25 million people?

T-Mobile was asked that by 556 Ventures analyst Bill Ho during its Q1 earnings call on Thursday.

“It gets harder and harder. And as a rule of thumb, I would say that it’s about 3 times harder for every 10 million that you add. So that’s about how hard it gets,” answered T-Mobile President of Technology Ulf Ewaldsson.

The geography of the U.S. is what makes it tricky. Wireless operators tend to focus on the most populated and dense areas of the country when they roll out a new generation of technology. Then they pan out to the less populated suburban and rural areas. That’s the stage at which T-Mobile finds itself.

“It’s very easy when you start out and it gets harder and harder to do it,” Ewaldsson said. Of course, “we are very confident that we are going to reach that with the build plan that we have today.”

T-Mobile is still waiting for the government to release the 2.5 GHz licenses it won in last year's FCC auction, and many of those cover rural areas of the country. Former T-Mobile President of Technology Neville Ray penned a blog earlier this month asking the FCC to grant Special Temporary Authority (STAs) so that it can turn service on in many of these markets while Congress finds a way to reinstate the auction authority. 

T-Mobile was the first to declare nationwide 5G coverage in 2019, but that was with its lower-band 600 MHz spectrum. In 2021, it reached its goal of covering 200 million people with Ultra Capacity 5G, which is the speedier version that relies on the 2.5 GHz mid-band spectrum T-Mobile acquired with Sprint. Now it's looking to narrow the gap between the current 275 million and the year-end goal of 300 million people covered. 

T-Mobile today has 150 megahertz dedicated on its mid-band spectrum, and that’s producing tremendous speeds, Ewaldsson said. It will end the year with 200 megahertz of dedicated spectrum just on its mid-band.

Smaller markets & rural areas

Even without that last 25 million POPs covered with 2.5 GHz spectrum, T-Mobile is making a concerted effort to grow market share in smaller markets and more rural areas.

One of the ambitions the company talked about during the 2021 Analyst Day was to move from 13% share of households to 20% share in these smaller markets by the end of 2025, said T-Mobile Consumer Group President Jon Freier.

“What we are really excited about is that we’re already halfway there. We are now at 16.5% in terms of our share in household position. So more than halfway there or halfway there, but in less than half the time over that planning horizon,” he said during the earnings Q&A.

Freier said T-Mobile is now playing in two-thirds of smaller markets in rural areas, where there are 140 million people and 50 million households that represent 40% of the U.S. population.

As for distribution in these markets, he said they’re building out hundreds of stores – over 400 – since starting this venture in the smaller markets and rural areas in 2021. In some cases, it’s able to get a foot in the customer’s door with the fixed wireless access (FWA) home internet service.