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Summary

Sprint's gathering of industry analysts in June, where it provided updates on various aspects of its business, including 5G and IoT, brought its deployment/launch plans into clearer focus. Its 2.5GHz spectrum holdings will enable it to forge ahead in 5G, gaining a foothold in the market as it awaits approval of its merger with T-Mobile.

Sprint plans 1H19 mobile 5G launch, with fixed-wireless 5G still on the table

Sprint's mobile 5G plans consist of building a nationwide network using its vast holdings of 2.5GHz spectrum, which it sees as the sweet spot for balancing range and speed: It offers greater coverage than networks built using mmWave bands and has greater capacity for higher speeds than 5G networks using ultralow, sub-1GHz spectrum bands.

But while Sprint extols the value of its 2.5GHz spectrum, the company also cites complementary spectrum holdings as an advantage of its proposed merger with T-Mobile. T-Mobile has both a nationwide footprint of low-band spectrum at 600MHz and some mmWave high-band spectrum to provide better network capacity in dense urban areas. Together, they would offer both depth and breadth of coverage. However, Sprint is not sitting back and waiting for the merger to be approved. It didn't confirm whether it would participate in the upcoming mmWave spectrum auctions, but said it suspected the auction will be fierce – which probably means it will participate.

Sprint said it plans to launch 5G in select markets in 1H19 and continue to build out the network beyond 2020, focusing on its 100 key markets, clarifying earlier misunderstandings that Sprint's 2019 goal was to have a nationwide 5G network. The first markets for Sprint's 5G network will be Atlanta, Chicago, Dallas, Houston, Kansas City, Los Angeles, Phoenix, New York, and Washington, DC. Sprint says coverage in these markets won't be limited to hotspot zones, but rather will cover a significant portion of each city's metro area. In New York, it will cover all of Manhattan; in Phoenix, it will cover 230 square miles.

Sprint started the deployment by adding massive MIMO equipment to existing 2.5GHz sites, beginning in April 2018 at sites in Los Angeles, New York, and Dallas to support LTE. Deployments are set to continue through 2H19. With massive MIMO in place, only a software upgrade is required to launch 5G. The initial network will be dual connectivity with LTE, and beginning in 2020 Sprint plans to introduce 5G NR standalone into its network.

Sprint has made no announcement about fixed wireless 5G, but because 2.5GHz spectrum enables this functionality by virtue of being at the low end of the high band for fixed wireless, Sprint is considering offering the service. Interestingly, Sprint originally acquired its 2.5GHz spectrum with fixed wireless in mind. T-Mobile has also said it could offer fixed wireless 5G if its merger with Sprint is approved. Currently, Verizon and AT&T have plans for fixed wireless 5G, with Verizon having already set out initial markets and time frames for launch.

Merger would enhance 5G spectrum portfolio, but even solo, Sprint should move swiftly toward 5G

A merger with T-Mobile is the ideal situation for Sprint's (and T-Mobile's) 5G future. Sprint's 2.5GHz spectrum will bring it far with 5G, but the mix of low-, mid-, and high-band spectrum that a combined Sprint/T-Mobile would have is far more compelling. On its own, Sprint should go after mmWave spectrum, and potentially look for ways to secure low-band frequencies for 5G as well. Sprint’s likely participation in the mmWave spectrum auctions later in 2018 is the clearest way for it to secure the high-band spectrum it needs to bolster coverage in dense urban areas on its own. In terms of low-band spectrum, Sprint holds a small amount in the 850MHz band – a national weighted average of 14MHz, compared to 151MHz for its 2.5GHz holdings. According to Allnet Insights, that spectrum could potentially be reallocated, but as far as Ovum has seen, Sprint has not discussed that option.

While Sprint is on its own, it should deploy its 5G network as swiftly as it can in order to compete with T-Mobile. The two have similar deployment strategies, striving for broad coverage areas, with T-Mobile aiming to swiftly deploy 5G until the network is nationwide in 2020. In comparison, Verizon and AT&T are both taking more of an urban hotspot strategy with their initial 5G deployments. If for any reason the merger isn’t approved, Sprint will need to have put itself in a strong 5G position.

Appendix

Further reading

US Update, September 2017, TE0001-001093 (October 2017)

"Sprint and T-Mobile make the case for improved 5G offering, but merger would risk price rises," GLB007-000074 (May 2018)

"Major US operators are aiming for different 5G goals," GLB007-000070 (May 2018)

Author

Kristin Paulin, Senior Analyst, Americas Service Provider & Markets

kristin.paulin@ovum.com

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