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25 January 2019

USA’s 5G will be a patchwork as each operator adopts different spectrum

One of the main reasons to move to 5G New Radio rather than enhance 4G for a few more years – the only reason for many operators – is to be able to use additional spectrum bands in a standard way, and so expand the capacity available for mobile broadband.

This advantage is overplayed in many regions, such as Europe, where most MNOs are using very little of their existing mid-band spectrum, including 2.6 GHz airwaves purchased for LTE. However, the charge into mid-band and even millimeter wave (mmWave) frequencies for high capacity 5G is being driven by operators with a genuine spectrum squeeze, including some in north America, and by the general need, in developed markets, to address congested hotspots of usage such as city centers and stadiums.

But that does not mean the US operators will necessarily be spending large sums in auctions – Sprint, Verizon and AT&T all say they have accumulated enough spectrum in the mid-band and mmWave ranges, in deals that were not 5G-specific, to last for a long time. Sprint can repurpose its plentiful assets in 2.5 GHz for 5G, while the big two have acquired high frequency airwaves from former LMDS broadband wireless players.

The USA is setting the pace in 5G, along with South Korea, China and Japan. But the US operators are setting different spectrum priorities. T-Mobile, the biggest investor in the 600 MHz incentive auction, will focus first on the broad coverage that a low frequency band enables cost-effectively, and will be using the faster speeds to deliver more video services and continue with its ‘more data for less money’ commercial strategy.

Verizon and AT&T are starting in mmWave, having acquired assets in these high bands (28 GHz and 39 GHz) by purchasing former LMDS firms, rather than waiting for this year’s mmWave auctions. They are initially using the high capacity, short range spectrum for fixed wireless access (FWA), though AT&T plans to add mobile services quickly and move into mid-band airwaves.

Sprint is the most cautious about 5G timescales, partly because it has a huge store of 2.5 GHz spectrum (at least 110 MHz in most markets) with which to make 4G run at 5G-class speeds. Until recently, it said its strategy was to deliver 5G-like services on its LTE network, which would reduce its costs by deferring the day when it needed to invest in a major network upgrade (so soon after its barely-completed and problematic 4G migration). Recently, though it has become more aggressive about 5G timescales, presumably fearing that, once again, it could be seen as the slow mover as it was in 4G.

More importantly, it has had to talk about 5G to make its proposed acquisition by T-Mobile seem more attractive to regulators. The argument is that the two companies have complementary spectrum and coverage, and with the mixture of low and high band airwaves, could deliver unique services and quality of experience to US consumers and businesses – and that, unless they merge, they will not be able to be effective competitors to the big two.

Approval of the deal has hit some roadblocks in recent weeks (including a pause for the current government shutdown; embroilment with the US-China trade wars; and some controversies over alleged customer data sharing). The process is stalled for now, but meanwhile, the two US players have to set out their 5G strategies even if they end up going it alone (or, eventually, merging with another company, probably a cableco).

Sprint now says it will launch its first 5G services before the middle of this year. It recently completed the world’s first over-the-air 5G data transmission using the 2.5 GHz band combined with Massive MIMO antennas. This was conducted, using Nokia MIMO, on the carrier’s live network, and came a week after T-Mobile boasted of its own world-first, a 5G video call and data session on a live 600 MHz network.

The two tests were surely designed to demonstrate the benefits of the 600 MHz/2.5 GHz combination, providing an ideal balance of capacity and coverage – if the two firms were merged – and possibly deferring the need to acquire mmWave licenses or address the still-complex engineering challenges of deploying cost-effectively in those high bands.

Sprint used Nokia’s dual-mode AirScale Massive MIMO radio and a smartphone test device powered by Qualcomm’s Snapdragon X50 5G modem. “The test demonstrated a seamless transition of connectivity between Sprint’s 4G LTE Advanced and 5G network, while streaming YouTube videos, conducting Skype audio and video calls, and sending and receiving instant messages,” the carrier said in a statement.

“This is a big step forward—Sprint 5G is now out of the lab and in the field as we prepare for our commercial launch in the first half of this year,” said CTO John Saw. “We’re making great progress toward giving Sprint customers the first mobile 5G experience in nine top cities with the first 5G smartphone in the USA.”

Sprint previously reported a successful 5G NR data call in its lab in Reston, Virginia, using 2.5 GHz spectrum and Massive MIMO equipment from Nokia and Ericsson. It plans to launch commercial 5G services in Atlanta, Chicago, Dallas, Houston, Kansas City, Los Angeles, New York City, Phoenix and Washington DC by June.

Sprint also launched a new version of its UE Relay device, an indoor small cell device that links to the macro cell, which includes a smart speaker. The operator’s indoor 4G Magic Box device comes from Airspan and can be backhauled using relay or mesh.

Over at Verizon, the operator says it will not need any more spectrum to achieve its medium term 5G goals, at least. It says it has used about 53% of its existing spectrum holdings for LTE and will allocate the rest to 5G. And about 60% of its mmWave airwaves are not yet in use.

Ronan Dunne, the company’s president, made the announcement at the recent Citi 2019 Global TMT West Conference. “We have an explosion of capacity in the areas where the demand is created by the largest contiguous holding of millimeter spectrum on the planet,” he said.

Dunne said that business-to-business was the fastest growing part of Verizon’s revenue base, strengthening the idea that many operators will need to accelerate their industry-focused efforts to drive new income from 5G.

The claims, by both Verizon and Sprint, that they have enough spectrum to last for at least the first phases of 5G, may dampen competition in the upcoming mmWave auction, and reduce the US Treasury’s expectation of future spectrum revenues.