T-Mobile is in fact moving fast on its integration into post-merger networking and building, executives said Thursday, dismissing comments from three public tour companies that implied that T-Mobile was a slow start.
During T-Mobile’s second quarter call, CEO Mike Sievert said the tour companies were “spreading some disinformation” about T-Mobile’s pace of networking initiatives since the closure of the Sprint merger on April 1. new 2.5 GHz spectrum already live in large markets and are expected to reach thousands of cities and towns across the country by the end of the year. Tour companies, however, just do not seem to have early advantages.
At recent Q2 revenue talks, executives at American Tower, Crown Castle and SBA all said they did not see as much tour activity and new business from the new T-Mobile as they expected at this point – but were optimistic that would pick the line down .
Before their merger, standalone Sprint and T-Mobile each plan to build many sites, T-Mobile for more capacity and Sprint for coverage, Sievert said. But the combination comes with what is called the avoidance of sites, where the new T-Mobile does not have to build new sites in all the locations they have on their own. That translates to money that T-Mobile does not have to spend, but is perhaps not so great for tour companies.
“I know it’s hard when you’re a tour company because billions and billions of dollars of page-side cracks are causing the kinds of comments you hear from them right now,” Sievert said of the call.
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American Tower, for example, lowered its forecast for 2020 for organic tenant growth to 4.5% from 5%, after the expected major disaster in T-Mobile tower activity and new business had not yet materialized.
“It’s really isolated to the new T-Mobile and the timing of when it’s starting to climb,” said American Tower CFO Rod Smith during his call for profit.
However, the fact that tour companies are not yet seeing high costs does not affect the pace of T-Mobile, Sievert said.
“We are moving at an incredible pace,” said T-Mobile technology president Neville Ray about the call for revenue. The operator’s low-band 600 MHz 5G occupies 250 million people for width, with depth coming from the mid-band 2.5 GHz piece. T-Mobile also has plans to add millimeter wave spectrum on top and bake the so-called 5G layer cake “super, super fast,” according to Ray.
For example, T-Mobile began upgrading activity at about 600 pages per week, each week at the end of the second quarter. In July, that figure jumped to 700 pages a week – meaning thousands of pages per quarter.
While Ray said he could no longer be happy, he acknowledged that the tour companies might not feel the joy.
“We could have done a little more with the towers, but there is currently a competitive process in play and we have choices we can make,” Ray said, noting that he expects more towers in the second half builds, though it’s seen as a song. ‘That does not slow us down. We have a lot of options to build and we are building fast. “
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Wells Fargo analysts said in a note to investors on Thursday that T-Mobile’s comments confirm what American Tower, Crown Castle and SBA reported about a lack of T-Mobile’s disaster, but the company believes it’s just over the horizon is.
T-Mobile is strategically working on its network in a way that “maximizes its network-building efficiency,” but enables early-stage public tour companies, according to the company.
Still, as American Tower points out, it’s more of a timing issue and Wells Fargo thinks T-Mobile will move strongly on tower towers in the very near future.
“We think there is competitive positioning between New T-Mobile’s network team and the towercos, but ultimately the network should approach the scale-up public towercos sites,” wrote the Wells Fargo team led by Eric Luebchow. “With the full spectrum made available, we believe it’s only a matter of time before this new construction activity materializes for the towercos.”
The company expects activity to come as early as the end of the third quarter.
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