T-Mobile Was so Hyped for 5G They Released It Early
T-Mobile (NASDAQ:TMUS) kept its promise to release its 5G network but, rather than launching December 6th as they previously announced the network is actually live today. T-Mobile is the 3rd largest nationwide wireless carrier in the United States with a history of over 25 quarters of adding 1 million net users of the service. The company is also looking to complete its acquisition of rival provider Sprint (NYSE:S) in early 2020. While T-Mobile opened up its 5G network today users on Metro by T-Mobile will still need to wait until December 6th to access the new 5G network. Unfortunately though, for at least the majority of users, to access this new network you will need to purchase a 5G enabled phone.
Currently, there are only two phones that work with the new network standard and those are the OnePlus 7T Pro 5g McLaren Edition or the Samsung Galaxy Note 10+ 5G and these are only available on pre-order. So until you have either of these phones you won’t be able to experience the new speeds on offer from the T-Mobile. T-Mobile is also planning to have 15 new phones that are compatible with the 5G network coming out in 2020. If you are on more of a budget it might be a better idea to go ahead and wait out the early release of the network and for the company to complete the next round of upgrades. One other wrinkle is that the coverage may not be available in your area, so it would be a good idea to review the 5G coverage map before purchasing a new device.
While T-Mobile is calling this 5G, users shouldn’t expect to see huge download speeds just yet. The reason for this is the frequency that T-Mobile is using for this first round of deployment is quite low. This means that the company doesn’t need to launch into overly expensive densification projects that would be a costly source of capital expenditures. Just as AT&T (NYSE:T) tried to rebrand their LTE service as 5G and were called out by T-Mobile and others, this release will mostly serve to increase the robustness of the rural networks T-Mobile already provides while also increasing the signal strength inside of buildings and structures in the cities at a much lower cost than trying to deploy millimeter wave spectrum which has incredible difficulty in passing through common walls. Hopefully, the company’s 5G will be better than just slightly faster 4G LTE otherwise the company looks to face similar criticism as it leveled at AT&T.
I would expect to see an increase in phone sales for T-Mobile as they use this release to attract more customers to the service. Quarter 3 of 2018 the company saw Postpaid Net Additions of 1.079 million and Quarter 4 of 2018 they saw 1.358 million new customers. With the steady growth of the company and the new 5G network, I would like to see in the next quarter if T-Mobile could beat these numbers. Last quarter they raised guidance from 3.5 to 4.0 million to 4.1 to 4.3 million. This would mean, based on the current numbers, T-Mobile is expecting to see 899 thousand to 1.09 million new adds for Quarter 4 of 2019. Since the company now has over 25 quarters of exceeding 1 million net adds and with Q3 of 2018 coming in at over 1.3 million I think these estimates may be slightly conservative.