The Many Moves That Pushed T-Mobile Ahead Of AT&T

T-Mobile
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T-Mobile recently announced that it has surpassed AT&T in total number of customers becoming the #2 wireless provider in the United States. T-Mobile has gone through many major changes in an incredibly pivotal time not only  amid COVID-19 and its integration with Sprint, but also as wireless carriers deploy 5G networks..  

If you have been keeping up with Moor Insights & Strategy’s five-part series about 5G, you would know that T-Mobile has set itself up to deliver a balanced mix of consumer and enterprise 5G services following the Sprint merger. You can read about our five-part series starting here for part 1part 2part 3part 4, and part 5 with another analysis of the 5G opportunity in research here. The 5th part in the series was written by senior analyst Will Townsend and is specifically focused on global carriers. Both of these pivotal changes, between transitioning to a 5G network and merging with Sprint, have complimentarily resulted in T-Mobile taking the #2 spot for Wireless provider and arguably the #1 spot as most extensive nationwide 5G coverage.  

For this blog, I do not plan on going into too much detail, but rather I will be referencing Moor Insights & Strategy’s Senior Analyst Anshel Sag, Mr. Townsend, as well as other personal blogs and articles written in the past. Let’s look at what led to T-Mobile being the undisputed growth leader in wireless, the wireless leader in 5G coverage, and overtaking AT&T as the #2 wireless provider in the U.S. 

T-Mobile’s growth in coverage translates to growth in customers 

I think T-Mobile’s approach to implementing 5G across the nation is one of the key reasons why it was able to pull ahead of AT&T. I also think it is a reason that T-Mobile can be considered the #2 spot for wireless carriers, it has more 5G coverage, and a T-Mobile’s 5G coverage spans 1.3 million square miles to more than 250 million people. That is more than double AT&T’s coverage, while Verizon, the #1 carrier in the nation, has only .4% of that 5G coverage. 

Arguably, T-Mobile’s growth in coverage has taken part in its growth in customers, leading it to be an industry leader in customer growth in Q2 of 2020. It has 1,245,000 total net additions, 1,112,000 postpaid net additions. Both these numbers have led to T-Mobile having 98.3 million total customers at the end of Q2 to take the spot as the second-largest wireless provider.  

T-Mobile is the first wireless carrier to launch nationwide Standalone 5G coverage. 
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With Verizon in the number one spot, I see T-Mobile surpassing that with its comparatively mature Standalone 5G network in low, mid, and high bands. Moor Insights & Strategy Senior Analyst Anshel Sag laid out here how T-Mobile became the first Standalone 5G Network with full coverage across the entire United States starting with its 600MHz band. T-Mobile started with 600MHz band with better coverage and lower speeds while other titans like AT&T and Verizon started with mmWave and worked its way down, and it put them behind on the curve.  

The incredible part about this is that this is not the first time T-Mobile has done something like this to become the first to roll out a new network. In the early adoption of 4G, T-Mobile became one of the first to have 4G-like speeds with its HSPA+ network. HSPA+ isn’t really 4G but rather a faster and more 4G-like 3G network in terms of speed built off T-Mobile’s already existing 3G network. It was sort of a big deal and was advertised as 4G even though it technically wasn’t, and it didn’t require customers to upgrade devices to get the network. Nevertheless, T-Mobile excelled because of it, and it is a similar strategy we see with T-Mobile’s rollout of its 5G Standalone network. T-Mobile’s strategy was to roll out not the fastest 5G band first, rather the band that has the most coverage first, which is 600MHz. This was the right strategy, we believe, because coverage is usually the most difficult thing to deliver when rolling out a new network. This is especially true when you consider that Verizon and AT&T both went mmWave first.  

Another reason that T-Mobile was able to expand its coverage and drive growth faster than AT&T and Verizon is a direct result of the T-Mobile, Sprint merger. Senior Analyst Anshel Sag wrote here how after the merger T-Mobile would be a 5G powerhouse, and I can confidently say he was right. 

Mergers are generally a difficult task to pull off, and the merger had a lot of push back and resistance. Sprint and T-Mobile’s synergy coming into the merger had a huge impact on Sprint’s 5G holdings, filling the gaps between T-Mobile’s 5G holdings in what Anshel referenced above as its 5G layered cake. Sprint and T-Mobile also have strong leadership with Mr. Townsend mentioning how former Sprint CEO Marcelo Claure was not afraid to take risks.. Mr. Townsend has also spent considerable time with Sprint executive management, including former CTO John Saw and IoT leader Ivo Rook. One of the key advantages that Sprint brings to the new T-Mobile is more enterprise service balance given a historically consumer-centric T-Mobile. 

An Illustration of T-Mobile’s 5G layer cake with the wider base is representing wider coverage with the taller layer representing speed. 
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An Illustration of T-Mobile’s 5G layer cake with the wider base is representing wider coverage with the taller layer representing speed. Source T-Mobile 

We can also look at T-Mobile’s focus as the “un-carrier” or the advertisement that it doesn’t want to be a looming carrier service that has hands in both pockets, rather, wireless connectivity is a product that should be given to customers as freedom and value. I think this affordable “un-carrier” theme and T-Mobile’s quality customer service approach are two very appealing sentiments for customers. One of my own, Moor Insights & Strategy interns Jacob Freyman, can testify to T-Mobile’s great customer service. Jacob has been with T-Mobile since T-Mobile was VoiceStream and, throughout his experience, always had good coverage.  I think this makes the Sprint merger even that much more valuable for T-Mobile as 5G is more than just coverage for consumers and will benefit and create opportunities enterprise for the cloud, data center, and edge. 

Wrapping up 

T-Mobile has experienced tremendous growth over the past year with its 5G network, and its merger with Sprint has created newfound synergies with an expansive spectrum footprint. This has led to overtaking AT&T and becoming the second-largest wireless carrier based on prepaid and out paid customers.  

T-Mobile is the first to deliver full 5G Standalone coverage nationwide which will likely lead to a further growth. . The T-Mobile and Sprint merger has also brought significant leadership strength and balancing of consumer and enterprise services. As a result, I don’t see T-Mobile slowing down or stopping anytime soon.  

Note: Moor Insights & Strategy co-op Jacob Freyman, analysts Anshel Sag and Will Townsend contributed to this article.