Consolidation

Here is where we expect to see all the savings. In the consolidation of sites, towers, cores, contractors, processes, stores, departments, and so on. It’s all going to save money. While they will start with 2 headquarters, I am sure that will wither down to one eventually, maybe 3 years. 

It may not be as easy as we think. When merging carriers, they generally merge the spectrum into one or the other. In this case, 4G requires a lot of spectrum. 

AT&T has done a good job of integrating smaller companies into their system. However, this is a larger integration. T-Mobile has done it in the past, but there are differences now. 

T-Mobile merged smaller carriers into their network before. They have some experience even though it was not major.

I mentioned before how the consolidation of the networks will see savings. I broke each section out below. 

Spectrum Consolidation

I had to rewrite this because we need to include DISH. Assuming they actually do what they signed p for, they will play a part in offloading of Sprint’s spectrum

Spectrum consolidation will be interesting. First off, will the FCC let them keep all the spectrum? Will they be able to have this much spectrum? I can’t wait to see what happens and how the FCC will reign in the excess spectrum. 

I would think if T-Mobile could turn spectrum in, they may turn in the 700MHz, but then again, maybe the 1900MHz would be better. Sprint, on the other hand, would probably turn in the 800MHz. I have no idea if the FCC will recall some of the spectrum, but it would not surprise me. I am curious if the FCC would let them choose or make a demand for what should be given back. 

Let’s look at what they have today;

• Sprint
  • 800MHz, FDD, band 26
  • 1900MHz, FDD, band 25
  • 2.5GHz spectrum, TDD, band 41
• T-Mobile US
  • 700MHz, FDD, band 12
  • 1900MHz, FDD, band 2
  • 1700/2100MHz, FDD, Bands 4 and 66
  • 600MHz, FDD, Band 71
  • 39GHz, N260, pockets,
  • 28GHz, N261, pockets,

What will they have post-merger?

• New T-Mobile US;
  • 700MHz, FDD, band 12
  • 1900MHz, FDD, band 2
  • 1700/2100MHz, AWS, FDD, Bands 4 and 66
  • 600MHz, FDD, Band 71
  • 39GHz, N260,
  • 28GHz, N261Band 41, 2.5GHz
  • 1900MHz, FDD, band 25
  • 2.5GHz spectrum, TDD, band 41
  • 39GHz, N260, pockets,
  • 28GHz, N261, pockets,
• DISH
  • 600MHz, 10 MHz bandwidth, almost nationwide,
  • 700MHz, 6MHz bandwidth, almost nationwide,
  • 800MHz spectrum, 14Mhz spectrum, almost nationwide,
  • AWS-3, 10 to 30MHz bandwidth, scattered across USA,
  • AWS-3 uplink, mostly 15MHz bandwidth, almost nationwide,
  • AWS-4 downlink, 40MHz spectrum, nationwide,
  • 28GHz LMDS, 1,150 MHz bandwidth, a few places in USA,
  • 12.2GHz MVVDS downlink, 500MHz scattered across the USA,
  • 24GHz, mostly 200MHz spectrum, a few places in the USA,

As you can see, DISH is looking good for the spectrum. Even though most people say they will need more to compete, I would say, they need to build a system to compete. 

Why do people overlook the fact that DISH has commitment issues? To me, it seems like DIsh would rather spend a ton of money on lawyers and fight to keep the spectrum instead of taking that money and putting it into a network. 

Seriously, WTF?

They have to build and commit to building. They have to come up with a plan for the network they want. If they want an all data network, then build an all data 4G or 5G network. The OEMs are less and less significant, but it’s good to have competition.

They seem to have chosen Ericsson as the sole vendor. Good luck with a single vendor. Let’s see how that plays out for a nationwide system.

They had a spectrum to work with, yet, they have little to show for it. History is not on their side. 

The good news is that they will buy two large MVNOs from Sprint/T-Mobile. That gives them an immediate subscriber base to work with. Unfortunately, many of them rely on voice and may have 3G devices, I don’t know, but it means when they migrate they will lose subscribers by forcing them to get 4G or 5G devices.

In all honesty, who cares, lost the legacy and added new 5G customers. That would make the most sense. So, maybe that’s a good thing, you know, trimming the fat. 

Spectrum Links:

• https://www.fiercewireless.com/wireless/wake-doj-deal-where-dish-s-spectrum-and-how-much-does-it-have
• https://www.theverge.com/2019/7/26/8931827/dish-carrier-plans-5g-network-tmobile-sprint-us-confirms
• https://www.fcc.gov/sites/default/files/dish-letter-07262019.pdf
• https://www.speedtest.net/insights/blog/new-t-mobile-spectrum-coverage/
• https://www.t-mobile.com/support/coverage/t-mobile-network
• https://en.wikipedia.org/wiki/Cellular_frequencies_in_the_US#cite_note-B12-2

 

Technology and OEMs

When we look at technology, it’s easy to say, deploy 5G. That’s why the merger got pushed through, right?

Deploy 5G and do it today!

That’s all I hear in the news. 5G will do this and do that. 5G will change the world, just like 4G changed the world. 

Do you know what changed the world? Wireless connectivity! Everything after that was an upgrade, just like 5G is an upgrade over 3G and 4G.

There are a lot of reasons we can’t go to only 5G today. For one, you need an emergency voice solution like e911 is every site for mobile. Not an app but an actual e911 service.

That’s why Sprint had kept 3G for so long because they didn’t want to upgrade to VoLTE. They thought it was better to maintain a legacy system than to commit to 4G by adding VoLTE.

VoLTE, Voice over LTE, can do e911. 5G can not. Hence, if you deploy 5G at a site, then you need 4G VoLTE to support the e911 service. 

Keep that in mind when pushing 5G. The OEMs need to get the 5G voice solution completed, working, and reliable. Then they need to add e911 service.

Unlike Wi-Fi, which does not require e911. If your phone does e911 calling, the device needs to have an emergency switch back to voice for e911 services. 

Sorry, I went down a rabbit hole, apologies.

So, what OEMs are the carriers using today?

• T-Mobile;
  • Ericsson, both TMO and S,
  • Nokia, both TMO and S,
  • Samsung, just S had them so we will have to see if TMO keeps them, but probably not.
• DISH
  • Nobody but committed to using Ericsson for their new network. 

What I see is Samsung may lose out. They would need to provide a really great solution for about half the price. I am not sure they could do that. 

The chance that Samsung would have is to have an awesome 5G solution that is very cost-effective. It helped them get into Verizon. They made progress there. So maybe they can repeat that magic at T-Mobile.

To combine the spectrum may not be so easy. Sprint recently upgraded to VoLTE for voice, which is great news because now they can scale back the 3G equipment. That is more expensive to maintain and takes bandwidth away from 4G and 5G.

For the 3G, Sprint had CDMA and T-Mobile had GSM. For LTE it doesn’t matter as much, it’s all LTE. As they merge the networks it should not be a major factor. 

For the most part, they have the same OEMs and they can consolidate quickly. They can share equipment and it should not be a big deal to merge the 4G and 5G equipment at the tower sites. 

As long as Sprint upgraded to VoLTe everywhere, they should be set. The question is, did they?

There are issues at the sites that have to be worked out regardless of who the OEM will be.

Backhaul

At all the sites they have backhaul. Backhaul providers may be different. The types of backhaul may be different. 

Almost everywhere both companies have fiber. This is going to be consolidated and those agreements are generally easy to get out of. That should be big cost savings. 

Merging fiber generally goes very well and is little more than a maintenance window change. 

The question will be for the network, is what to do with the microwave sites. This may allow consolidation, but chances are the microwave would either need to be upgraded or replaced. 

Microwave is great when bandwidth is not an issue because you put it in once and you’re done. Nonrecurring expense, except maybe maintenance. 

The problem comes when you need more data throughput. Microwave can be very limiting. It’s not always easy to upgrade and many times it has to be replaced. 

Then, there are sites where Sprint uses UE backhaul. This is where they may connect to a band 41 site and use that as backhaul. This works well for small cells. I am not sure how much of this T-Mobile has invested in.

It’s generally a very cheap backhaul, one that works well, like microwave, until you need more bandwidth. 

Sprint likes this solution for their poles that they deployed, but I am not sure what the new engineering team will want to do. This is unknown to me. 

Leases

Here is the one thing everyone is convinced will save money. If you know how hard it will be to cancel a lease, then you may not agree. They will be stuck with many leases for years to come.

Oh, the legal fees on both sides will be huge, just to try to save money on the leases for years to come. 

This is why Verizon and AT&T we’re looking for alternative tower companies so that they could get better agreements.

Moving a site is a pain and the way it generally works is that the tower company can force you to move but if you want to move to a better or cheaper site, it’s next to impossible.

Those leases are probably the closest thing to being ironclad as anything I have seen.

That’s why their stock prices are so good! They learned how to entice the carriers to commit to a 20 year or longer lease. Leases that are easy to take to term rather than cancel.

Look at how long the Nextel equipment stated at the sites. After that merger Sprint was stuck with leases that had no out. They paid for them for many years.

When looking at leases, we have to look at Site Acquisition. This work should jump as the discovery phase starts. 

That’s in another article I wrote, but this is a precursor for that article. The audits that have to be done so that each side fully understands what the impact of merging sites will have on the site itself.

Towers, Rooftops, and Poles can be a pain to merge!

There is more to merging sites than the lease. and backhaul. They have to have physical space at these sites. They have to look at what they are leaving. They will also want to know if it makes sense.

Let’s look over what they have to look at before merging or moving:

• Utility power – is there enough power at the site and if not, what will the upgrade costs?
• Physical space on the ground – is there room on the ground for a new cabinet, shelter, cabling, etc? What is the rent cost for the ground? Does it make sense to move here and leave there?
• Physical space on the tower/rooftop – is there enough room on the tower to add to the existing platform or add an additional platform? What’s the cost? 
• Tower or rooftop loading – Can the tower/rooftop hold the additional equipment, cabinets, rectifiers, batteries, radios, antennas, and mounting equipment? What will structural mods cost to upgrade the structure? What will the site acquisition charge to do all of this? What is the city permitting limitations?
• Small cells – does it make sense to add or delete small cells? Can they be changed out quickly and cost-effectively? 
• Equipment – Can we add to the existing T-Mobile BBUs and RRHs? Do we need new antennas? Does massive MIMO make sense at this site? 
• Tougher questions – Do we really need both carriers at this site? Is the loading that severe that we need band 41 and 600MHz? Is this overkill?
• Devices – Can we just add the new spectrum to existing devices and start using alternative sites?

Someone over there is already looking into this. While I make it look straight forward here, the reality is that it’s going to take a team of people to work through all of this.

Look at what needs to be done for each site:

• Site audit
• Market audit
• Loading audit
• Backhaul audit
• Tower owner review, meaning a lease review
• Core loading review

The list goes on but if you’re in the business you understand how many people will be killing themselves to get this done in a timely manner. 

You would think they have this paperwork loaded into a database somewhere, but how accurate is it, really? The real world usually holds many surprises. 

Consolidation of equipment

This may not be so bad if they have the same OEMs. They should all work together in a 4G and 5G world. The spectrum is all over the place but the routers, BBUs, and associated equipment are pretty similar.

The exception is the massive MIMO gear that Sprint rolled out. That is unique but still, not a deal-breaker. In fact, the payback should outweigh the headaches of moving it.

The OEMs have made it easier than ever to consolidate equipment in a 4G and 5G world. Sure, you will have 3G gear out there, but that has to be fading away.

Today’s router can handle more than ever and they will be easy to consolidate. I see Cisco as a winner here, they seem to be the preferred router vendor of Sprint and T-Mobile. 

They also have a solid core solution for both carriers. 

Core

What is the core? It is the equipment that all the remote sites go back to for subscriber information. It’s that simple. The core is the interface between the site and the real world, or at least it used to be. It holds all the controlling servers for all the sites, so they know which subscribers are paying to be on the system and it tracks all the billing. It also tracks talk minutes and data usage. There is generally one per market or one per region. Look at it as the control center. 

Not only does each carrier have a core, but they have a core for each market or region. These are mainly huge data centers full of servers. This is carrier-specific and could have all the OEMs equipment from the field, like Ericsson, Nokia, and Samsung, along with the router OEMs, like Alcatel-Lucent, Cisco, and maybe Juniper. Massive data centers, for now, eventually they will move more and more to the cloud. 

The core for each carrier can be merged. This will probably take about 1 to 2 years. I would think now with virtualization taking off it would be easier than ever to migrate everything together. I would say that T-Mobile has been keeping its core up to date. Sprint still has legacy 3G support, but maybe the 4G and 5G core components can be migrated into the T-Mobile core quickly and efficiently. I don’t see why not. It’s a great time to put it all together. 

It will take a lot of planning, engineering, and effort to merge the cores. However, it’s not impossible. I would think that there are synergies that they could take advantage of. They both use the same OEMs, Nokia, Ericsson, and Cisco. That will make it easy for the T-Mobile core to absorb the 4G Sprint traffic.