T-Mobile US, Inc. (TMUS) Management Presents at Oppenheimer 5G Summit (Transcript)

Dec. 15, 2020 5:36 PM ETT-Mobile US, Inc. (TMUS)1 Like
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T-Mobile US, Inc. (NASDAQ:TMUS) Oppenheimer 5G Summit Conference Call December 15, 2020 11:30 AM ET

Company Participants

Neville Ray - President of Technology

Conference Call Participants

Timothy Horan - Oppenheimer

Timothy Horan

Good morning, everybody. Tim Horan back again for our last session of the morning before we get a little bit of a lunch break. My pleasure to have Neville Ray here who is the President of Technology for T-Mobile. I've kind of seen Neville’s work for over 20 years here, and I think almost anyone in the industry, and I would say this for sure, Neville is probably the best wireless engineer in the world. He's kind of done miraculous things with T-Mobile's network, particularly over the last 10, 11 years, but frankly even before that he had like no spectrum to work with and he built a very, very large business.

And what we've seen over the last six, nine months is nothing short of astounding, integrating Sprint basically seamlessly. I did not think it was possible to do so, but it looks like it is well on its way and everything we're hearing, the mid-range 5G build outs are performing exceptionally, exceptionally well. But this is going to be I think a very, very interesting conversation. But before we get to the conversation, Neville is going to have to give us a bit of a disclaimer.

Neville Ray

Thanks, Tim, and great to join you this morning. Let me get that out of the way. So today, I'll make some forward-looking statements. They are subject to a number of significant risks and uncertainties, including those included in our filings with the SEC. And obviously, we cannot comment on the ongoing Auction 107.

Timothy Horan

Great. So now maybe just starting at a really, really high level, what is your network strategy and how does that fit into the company's strategy?

Neville Ray

Thanks, Tim. So I'm not sure how I live up to that introduction. I'll do my best. So it's a tremendous story here at T-Mobile and I’d just say out the gate, how excited I am with our position and our progress, and across the business and obviously on the network side, we've made huge strides, as you mentioned. We've come a long, long way in a short period of time. So, there's a bunch of different ways to translate on that one strategy. Clearly, for me, our ambition and our goal and our set of objectives is to be the leading wireless network in the U.S., and we believe we're in a position whereby we can now make that happen. We have the assets. We have -- post our combination with Sprint, we have the asset base in terms of spectrum, we have the sites, we have the team, we have the execution capability. And I'm sure as we'll talk this morning, we're rolling out our network upgrades at a furious pace here. This is – 5G is finally becoming real, despite a lot of noise and promises and many of them broken over the last two to three years. I think with the advent of the iPhone this year, with 5G capability, 5G started to become very meaningful in this tail, last part of 2020. And so for us, I mean this 5G opportunity is enormous. We see the capability to lead in this 5G space. We’re hands down, the coverage leader on 5G today. And our intent is to rapidly deploy 5G capability at a pace that's going to be difficult for our competition to match, and thereby start to drive a network leadership story at T-Mobile. And Tim, that's kind of new, right? We've been famous as a company for bringing tremendous value. Our uncarrier story in the industry is second to none. Our passion about delighting our customer base and ensuring that they're treated so well and they have great value, great offers, great promos, just a great experience, great service, many, many dimensions we lead as a business today, but we haven't led as a network team and as a network business. And we've spent much of the last seven years leveling the playing field with AT&T and Verizon, who had an advantage with spectrum if you go back seven, eight, nine years ago. We were bereft with low band spectrum as a company, but we leveled that playing field as we moved into the last two to three years. And so, here we are now with a tremendous set of assets for us to go roll out at the advent of this 5G era and in a position to go execute and become the leading company on network in the U.S. So that's maybe, that's an outcome rather than a detail on the strategy, Tim, but we are working across all the dimensions; coverage, performance of the network, capacity of the network, all the various pieces that you need. We have a maniacal focus on 5G because now is the 5G time and every dollar that we drive into this network is around 5G and what 5G can bring and the promise that 5G will bring to our business and our customers be the consumer or business customers alike. So super exciting time for us in a tremendous asset base that we can leverage and look forward to bringing to the market at pace here now.

Timothy Horan

And can you talk about that asset -- a couple of questions versus your peers? Can you talk about that relative asset base now? How does that kind of shape up versus your peers? And then I wanted to get into a little bit about how your strategy and network strategy differentiates from your peers?

Neville Ray

Yes. I think the combination with Sprint was a tremendous opportunity for us, and we were delighted after two years of rigorous work with the various government jurisdictional entities bringing that merger to a close in April, and what that did for us was it brought to the combined company a strength in both low band, mid band, and high band spectrum. And I love to talk about this layer cake of spectrum and capability that we have at T-Mobile, and the combination with Sprint allowed us to really fulfill an ambition we'd had to be in a really strong position across those bands. And that asset base is unlike anything else that Verizon or AT&T have at this point in time in the industry. We've been deploying a tremendous 5G coverage layer. We’re using our low band, our extended range 5G, and that's been going incredibly well for well over a year now. We launched our nationwide service at the tail end of last year, not in 2020, in 2019. We've deployed millimeter wave assets in the high band where it makes sense for us, not been a massive focus for us in the last part of 2020, but we've deployed meaningful assets there. And then the mid band story, as we secured those assets from Sprint, primarily the 2.5 gigahertz asset, we've been deploying that a real pace in 2020. And so bringing those assets to life for our customers, that's the key piece, getting those radio upgrades done, getting that spectrum lit up, and starting to deliver live a -- transformational 5G experiences. So, the asset base is incredibly strong for our business unlike anything else out there in the industry today, and that's a tremendous position to leverage.

Timothy Horan

And then could you talk a little bit about how your network strategy differentiates from your peers, and specifically in 5G?

Neville Ray

Yes. I think -- try not to give too long an answer, Tim. You know me. I love to do that comparison against our competition. But I’d say this. We started in a very different place from AT&T and Verizon, and we started with a coverage layer of 5G. And I think if you look at the evolution of wireless technology; 2G, 3G, 4G, now into 5G, one of the first things that you have to do is to drive meaningful coverage. And so, we started as I mentioned, with the nationwide layer rollout in 2019, over a year ago now, putting down that first layer with fellow 600 megahertz spectrum of meaningful 5G capability. So that was a tremendous start for us. As I said, we’re adding mid band and now we have millimeter wave assets in deployment too. So, those three pieces have been the layers that we've rolled out with our network. If I look at AT&T and Verizon, they started in a very, very different place, Tim. They started with millimeter wave. And if you go back to over two years ago now, the first start and launches of millimeter wave which were very small and maybe incidental, you could argue that the coverage was never there. And so, I love to think about layer cake in low band, mid band, and high band. Verizon and AT&T started with an inverted cake. And the problem there is that 5G experience, you have to be able to use it. We’re wireless guys. We're mobility players. And so we're not about building hotspot-like networks, right. We have to build mobility and contiguity of coverage and experience, and that's the whole essence of our strategy with a low band layer supporting them and mid band layer on top. And it's fascinating we are the only guys that did this, Tim. I don't want to sound too arrogant and beating our chests, but the industry had been focused on kind of TDD in the 5G space. And we said no, we want an FDD solution for low band, sub 1 gigahertz spectrum, primarily our 600-megahertz asset, and it was a hell of a job, right, to get the industry focus because there was so much focus on millimeter wave and the promise that would bring. We were deploying millimeter wave, learning about its coverage deficiencies and issues. Don't get me wrong, millimeter wave has its place, but it is never going to be the broad base coverage layer for a wireless network. And so, as we work through that millimeter wave story, we pushed the industry really, really hard to get low band 5G moving. And the beautiful thing is that when you put mid band on top of low band 5G, you're in a position to start aggregating 5G bands that starts in 2021. And you can start to offset some of the uplink coverage liabilities that exist in mid band spectrum, especially when you get further up the band. 2.5 is really strong, but not as strong as traditional mid band in the LTE space. You start going up into 3 gig, 4 gig, 5 gig. The uplink deficiency coverage limitation is even more of a concern. And so, being able to link a low band 5G layer with broad coverage just to enable a better mid band layer, that's always been part of our thought process and strategy. And quite frankly now, AT&T and Verizon, they're in a position -- we're in an auction, we can't really talk about mid band, but that bereft of a mid band story at this point in time. And so for us, I mean, a very, very different strategy, which is built on way more traditional mobility coverage experiences. Get the coverage out there, then start to build incremental experiences on top of that. But you've always got that 5G experience underneath. So very different starting point for us, lots of coverage on 5G compared to where AT&T and Verizon started. And of course, if you look at the strategic roadmap, Tim, they've all kind of flipped around, right? AT&T is now pretty much on our plan. So, they talk about millimeter wave as we do in high capacity needed areas; stadiums, some in building, pedestrian precincts where you need a lot of capacity. That's a great place. That's where you kind of finish off your network. I like to say millimeter wave is where you finish, not where you start. And so AT&T has flipped there. Obviously, they launched their nationwide 5G on low band earlier this year. And now you see Verizon coming in, same thing using DSS in this case, they launched low band services. And if you went back two years ago, they were calling us nuts, right? They said, this low band 5G thing, what do you need that for? And now, they've all flipped to that strategy because they realize it's an essential part of the 5G story to build out our coverage, that mid band hook and link and ultimately a layer cake of capability.

Timothy Horan

Well, Neville, you have that rare combination of being a brilliant engineer and a great communicator. You said that really, really well. Thank you for that color. I guess the coverage right now that you have on your network, how does that compare do you think to your peers overall?

Neville Ray

Yes. So that journey over the last seven years was to, I always say, level the playing field on LTE. And so if you look at the 320 plus million people covered with our LTE network, yes, there may be some gaps in some places, there are for the other guys too. But we spent much of the last seven years leveling that playing field and getting even on LTE. And whilst we were doing that, we were preparing all the time for this 5G rollout. And so if you look at 5G coverage today, Tim, there really isn't much of a comparison. We all use nationwide terms. And nationwide marketing speak means 200 million people covered. Verizon got there with about 400,000 square miles of 5G coverage on DSS. AT&T haven't announced the number, but if you map scraping, we're all very competent at doing this, assuming everybody's maps are accurate, they're about 600,000 square miles. So you add those two together, that's about 1 million. Our coverage today is about 1.4 million square miles. And so just between us and Verizon today, that's 1 million square miles of coverage differential. So if you think about 5G coverage, the leadership game -- leadership advantage that we put in place, it's game on. Verizon has a lot of work ahead of them to catch us. And of course, Tim, I love that because I've chased that Verizon coverage map for much of my career, right, be that in UMTS or LTE. And so the tables finally turn, where because we have the assets et cetera, et cetera, and a different strategy, be fair, we have now established a meaningful coverage lead in 5G. And why is that important? There was a lot of discussion in the early days of 5G rollout, Tim, where low band isn't important. I can tell you today, I look at this data every morning. And so our speeds on our 5G extended range low band layer, they are more than double our average LTE speeds or anybody's LTE speeds in the industry today, if you take industry averages. We're in that 90 to 100 megabit per second range on average, right. So that doesn't mean everybody's getting 100 megabits. But on average, there's a bunch of folks getting way more and there's a bunch of some folks that get less, but 100 megabits per second average. If you think about LTE, it took us almost, what, five years to double our LTE speeds to kind of 40 or 50 megabits per second with MIMO, Carrier Agg, all these features we're all screaming about and eking out like another 5 megabits per second on performance. We've just doubled and more than doubled our experience with low band 5G. So that's super important. Folks are opening up the box on their iPhone and they're seeing a 5G icon in way, way, way, way, way more places with us than AT&T or Verizon. And they're also getting an experience, which is markedly different than what they have on LTE. And you know the Verizon story on VSS, everybody's writing about it. It's about the same thing as LTE. Everybody came at me, Tim, earlier in the year, I said DSS was going to be lumpy in 2020, right, in a conference, I think, an earnings call, maybe in early January. And everybody was like, we don't believe that. It's been lumpy all year, it's still lumpy. There's interference issues on DSS. It's not a perfected technology yet. A couple of paths people are going down. But bottom line, the performance on a DSS layer isn't really -- can't really be that much different from what you have on your LTE layer. So it's almost as bad as the 5G thing that AT&T did where they told folks there's 5G when they were on LTE. So anyway, I mean, that 5G coverage piece is important. It's not just the speeds that you get on the icon and all those pieces, it starts to open up all of the IoT use cases and all these different exciting use cases that we talk about; be the agg, transportation, you name it. There's all these rich things in the 5G space and you need coverage then, right. If you don't have coverage, what can you do with 5G if you don't have coverage? But I'm super proud of the team and the rollout that we've secured on that low band 5G layer and it's going to continue to help us and give us a leg up on the competition, because of the asset base that we had in low band in 600 megahertz for years to come.

Timothy Horan

Well, I've got about 20 great questions, but one good one here, and I took clarification on what you said. So I think you referred to Carrier Aggregation of 5G where you can both use the low band, mid band and ultimately high band. So that's coming next year I think you said. I guess what's required in terms of the handsets or chips to enable Carrier Aggregation of 5G?

Neville Ray

Yes. So that's the main piece. The feature set, this is funky, Tim, right. So everybody talks about 5G being the super advanced technology, right. And so we're launching 5G in low bands, mid bands, high bands. We're using all sorts of smarts on the radio. But a bunch of the basic features and capabilities that we had with LTE, we're still battling through and we don't have in the network and/or in the handsets yet, things like Carrier Agg. So we can use duel connectivity, right, and we can connect the 5G layer with an underlying LTE layer. But if you want to aggregate 5G bands together, so we want to aggregate our low band and our mid band layers together in 5G, that feature is coming in '21, and early in '21. And the OEM rollout in terms of handset availability on that is going to be a little staggered. It looks as if across the OEM suite, I can never predict what will happen with one of the OEMs, but it looks as if that's a 2021 story complete. I know we'll have handsets that can support those capabilities and features in the first half, even in the first quarter of 2021. So those things are important. We need to get 5G over some of the basics. Voice on 5G VoNR, voice on new radio VoNR, we're working really hard with our vendors and people are looking at us going oh my God, that's a lot of work. And we're like, well, yes, but we have voice on LTE. Why wouldn't we have a solution on 5G that can offer voice services? And we'll probably be the first company that drives that, Tim, but it comes from a very different mindset. We want a 5G solution and technology with a broad coverage and capability that can support voice and great data experiences, all of those things, so that we ultimately over time we move to a 5G architecture across the board; first company to launch standalone 5G right earlier this year at T-Mobile. And so we're always thinking about how do you really -- we're not just about dropping a 5G capability on top of an LTE network, which I know is one of my competitive strategies, right. Let's add some hotspots and deep stovepipes [ph] of millimeter wave goodness on top of LTE. That doesn't compete, doesn't compete with a rich network with all those layers and ultimately, all of the services coming through and being supported on 5G. So when we go in, we go all in. And I think we're the first company on standalone. I expect we’ll be the first company to support VoNR and voice services on the 5G layer. I'm very confident we'll be the first company that really drives towards 5G aggregation between 5G bands in 2021. And so we love all those things, but it's because we want to see a comprehensive, powerful suite and set of 5G solutions and capabilities out there. And standalone is like, where I got all this 5G radio stuff, be pretty good to have a 5G core, right. So it kind of makes sense to make sure those things happen and not still running on an LTE core like my competition does. And so none of these things that are like rocket science, Tim, to be honest, the capabilities are there, the standards are there, we just have to drive with commitment through with the strategies into the OEM and the vendor community.

Timothy Horan

So, I guess, selfishly because I'm really sensitive to high quality voice, because I'm on the phone eight hours a day, when will you have voice over 5G do you think?

Neville Ray

Well, we'll start to see stuff in '21. But it's going to be early, Tim, right. We were one of the first companies that really pushed hard into VoLTE, because we had to. We needed a spectrum reform away from 3G into LTE. And so I'm hopeful that there's no reason in my head why VoNR should be as bumpy as VoLTE was. VoLTE was pretty bumpy. And if you go back to -- there's many parts of the world where voice services is still sitting on that, that GSM or UMTS layer. Everything we do is VoLTE. There's a little bit of UMTS and GSM left in our network, but very, very, very little. So we made that big move. And the thing you have to do is you have to build a full and complete coverage layer to support those services as well, Tim. And that was this belief in VoLTE that you could move between LTE and 3G and 2G and up and down. And to be honest, it never worked well. So you have to build out a comprehensive 4G layer. And our plan is to do the same thing on 5G. Can we start to light up VoNR services in certain areas of the country? Yes. And I think we'll be first to do that. Does that start in '21? That would be a part of our ambition to keep driving forward, but we'll see. Maybe more to talk on that as we go into early '21.

Timothy Horan

So on to the thing I'm sure you're spending most of your time on, I can be wrong about that sorry, but building out the 2.5 gigahertz spectrum that you got from Sprint. Can you talk about how much spectrum you're building out? What do you actually need to do to build it? And where are we into the process of deployment?

Neville Ray

Yes. So let me start on the last piece, Tim, We announced the earnings north of 30 million and our plan to be at 100 million covered pops by the end of this year, and we're on plan. I'm incredibly excited about – 100 million people covered with the first real 5G mid band layer in the U.S. a little while seven, eight months after we could start working on this stuff post close with Sprint, that's an incredible achievement for the team. And I've got a tremendous team now, the combined resources of legacy T-Mobile and legacy Sprint, working away so hard on deploying that spectrum and those radios. And 100 million by the end of the year was a really aggressive goal. We'll see how well we do against it. We're going to come super close, if not fly past it. And we'll update you as we move into early '21 with that. The ambition then for the end of next year, end of '21, is to double that footprint for 200 million, so a nationwide mid band -- for mid band layer in the U.S. And that's going to be transformational, Tim, maybe we come back to that in terms of the experiences and the speeds. But what does it take? So just quickly to the earlier part of your question, the longest pole in the tent, Tim, for us on all of this stuff is jurisdictional approvals to go do the work. So to get that permit to change the antennas, add radios, whatever it might be, I'm essentially changing out equipment or adding equipment on existing infrastructure. And I think sometimes there's misunderstanding in the industry. I'm not building new cell sites per se. I'm adding equipment to existing infrastructure; rooftops, towers, water towers, whatever it might be. And often folks will look at those, they'll never know the difference. But we have to go through that jurisdictional process per jurisdiction. Sometimes that's a -- could be six weeks, could be six months, could be a year at times. But the teams are out there. I have literally thousands virtual armies, not virtual, it's a true army of tower climbers, engineers, technicians who are out there and have been out there for the last seven, eight months. And, Tim, I'm incredibly proud of that team. We've kept them safe and healthy throughout the pandemic. But if you'd asked me back in March when the pandemic came upon us if we would have been able to work through the last three quarters the way we have, I would have said it was going to be probably unlikely. But kudos to the team and the jurisdictions who have gone online for permitting and those types of things, we've kept the machine running at real pace. And so now, I mean, we are literally upgrading. The last stats over the last few weeks, we've been starting work on over 1,000 sites a week, Tim. Every week, 1,000 sites are going into the hopper for upgrades, on air activity, commissioning, you name it. And so that's a mixed rate of 600 megahertz, 2.5 sites and some of the other projects we're working on. But it's the highest level of production from a network team I've ever seen in my career, unlike anything we've ever achieved at T-Mobile historically. And why is that important? Because I want to get all of that goodness, that 5G layer, in mid band rolled out as fast as possible, one to be out in front of my competition, but one because it's going to be so beneficial to the T-Mobile business.

Timothy Horan

So it sounds like you're mostly adding antennas onto the poles and new base station equipment. Are you deploying MIMO antennas? Are these large antennas? We notice like a lot more equipment on the poles.

Neville Ray

You'll see some. A lot of the 2.5 to mid band, this is massive MIMO, up 64 down. So 64 by 64, that's a big -- it's a decent size panel antenna, integrated radio, you name it. And in some of the sites we're still adding 600 megahertz antennas, and that's a big piece, again, right based on the wavelength. So the cool piece is that I can -- my team can generally deploy the equipment on a site within about, it's about 10 business days, Tim. So it doesn't take a lot of time to actually do the physical installation. Commissioning can take a little bit longer. But that long pole in the tent, the five, six months, why I've got this hockey stick shaped curve on stuff coming on air is it took me four or five months of permitting to feed the beast straight out there to actually drive all this onsite activity. And we've been kind of ramping our production rate as we've moved through the year. And then as we move into '21, the intent is to hit those run rates I was talking about and go steady state. And I want to do that for the next couple of years. Our commitment that we made to the FCC and the DoJ, Tim, was to roll out 5G to 99% of the people living in the U.S. And we have a funded business plan. We have a set of commitments that we need to meet, but a business plan and an execution plan that can work through that as we go through the next three to four years. We're super excited for that. One thing that comes to the back of all of this, Tim, we haven't talked about it, but we do all this work and I go from a massive combined network today, I shrink that network down to a smaller number of sites. And we generate a huge volume, billions of dollars of synergies. So there's this huge prize at the end of this journey, not at the end of the journey. We're already starting to deliver and develop synergies obviously. But there's this huge price for us with all this work where we can strip all of this cost, billions in operating costs out of our business with synergy generation. And so if you look at us versus AT&T and Verizon, everything they're doing on 5G is massively incremental to their cost structure. And we've got a ton of incremental costs coming into our business. I'm spending billions and billions of dollars we've said, 40 billion over the first three years on this network rollout. So we're spending capital, but we will be stripping out a ton of operating costs as we decommission sites that we don't need as we go through the next two, three, four years. So there's this synergy pot of gold for us at the end of this journey, which is tremendous. It's a very, very different business construct and financial construct compared to that of AT&T and Verizon right now with 5G.

Timothy Horan

And then just give me an idea for another report I need to do. I just need to benchmark you guys on a call center. I'm sure you do this every day, cost per subscriber and the network costs and other benchmarks to see where you can get major improvements. And I know you'll be doing that in your -- a lot more than your analyst day too and I guess the first half of next year I think.

Neville Ray

We're looking forward to that, Tim. That's going to be in early '21 and we're going to have an analyst day. And Mike Sievert, CEO; and Peter Osvaldik, CFO, will be there. I'll be presenting. I'm sure there'll be a few others that will be with us. And we'll talk in more detail about our synergy development story, the overall business plan and it’s super exciting, Tim. There's so many -- we've talked primarily about wireless today. But back to the top of the discussion, our plan is not just to be more aggressive in consumer, we're obviously now in a position where we can really aggressively target enterprise customers. We’ve made a great start there over the last two to three years with our business focus. So that enterprise growth space is huge for us. And then one last vector of growth that's super cool is broadband for us. And I think there's nothing -- the last eight, nine months has taught us that connectivity is more important than it's ever been, right, for everybody. We live our lives, most of us now, in some form of connected domain day-in, day-out. And we all know how broadband is not monolithic. There are many folks in the U.S. and many parts of the U.S. who are unserved, badly served, poor quality, high cost, no competition. And so the space is rife for us to come in with this tremendous asset we have, all the capacity that we can generate off of that mid band layer and really start to compete, not across the board. It's not like we're going to compete and take down Comcast and Charter as we move through the first two, three years. But we can become a formidable competitor to almost everybody in this broadband space. And we have an ambition to serve 10 million customers, 10 million households. There's about 120 million, 130 million in the U.S., so just less than 10% of the addressable market with our 5G fixed, wireless solution set. And that's a super excessive brand new area of growth for us as a company; new revenues, new opportunity and the cost to go after that space has very, very little incremental capital, because we're building the network for that wireless need. And we have a surfeit of capacity in many areas that we can now purpose to new growth opportunities.

Timothy Horan

So in this regard, the networks, everything, can you talk about what you're experiencing when you upgrade these sites in terms of how much more capacity you're adding and any other color on consistency of quality or jitter or latency would be great?

Neville Ray

Yes. Let's start on the spectrum piece, Tim. So when we start with the turnout, our first 2.5 gig sites, we were purposing somewhere between 40 and 60 megahertz for 5G. So, the national average of the 2.5 spectrum holdings, the spectrum we control and manage is about 150, 160 megahertz. So there's a bunch of that spectrum still being used for LTE et cetera, on legacy Sprint. But we started with 40 to 60. And, of course, that's TDD and the lion's share of it is directed towards the downlink. So as we exit the year, we're adding more spectrum to that. So in some areas, it will be averaging 80. There will be some markets where there'll be 100 megahertz, but probably starting to move towards that 80 megahertz average. I'm not giving you a fully clear number because it varies by market and loading and migration activity and all these different pieces. But long story short, what we've seen already with the 60 megahertz, the 50 and 60 megahertz, call it a 50 megahertz average, we're seeing speeds approaching 300 megabits per second. So if you go from a 40, 45 in LTE, seven, eight times, on average, so peaks that will go north of a gigabit per second on mid band. And as we exit the year, those numbers will trick up closer to 400. And as we move through '21 and we can add even more spectrum, that number starts to trick up even further than that. So the great story is that that mid band layer is incredibly powerful in terms of speed and performance. On a standalone architecture too, you get the latency benefits. You don't have to go through all of the legacy old LTE core. So that lightens up your speeds and your latencies and payloads. It's a tremendous story, Tim. And the fun thing is if you look at where has 5G service really started to innovate and pick up? So take a market like South Korea where the government awarded almost 100 megahertz in mid band through each of the cellular operators there, that's where you start to see real innovation come in, where they built coverage, they've got speeds and performance, and you start to see stuff happening in the application and smartphone space, which is really different, and very different from what was happening on LTE, much stronger and high resolution video, greater speeds, ability to do AR and new capabilities. And so test beds like that, they're all flying on mid band. And if you think about the one company in the U.S. that’s going to be in a position to provide that broad mid band coverage layer as we move into '21, we're providing in many markets already today, but in 2021 is T-Mobile. And it's only T-Mobile. And so I'm really excited. We're seeing a lot of interest come at us from developer community, enterprise and business community, because they realize that for all of this innovation on 5G use cases, the one thing you need, Tim, you need a network. And you can't just have a network under a street corner in Manhattan or in the corner of a factory somewhere where this stuff really comes to life and is going to delight and excite and drive new business for you for your consumer base, especially as well as your enterprise space, is when you can deliver those experiences on a broad basis, on a broad coverage basis. And that's what's happening globally if you look at it on mid band push, and we're the first company in a position to do that in the U.S.

Timothy Horan

Any other use cases you can point to in Korea or other countries around the world? I guess the question is, are they happy they deployed 5G? Do they see a way to kind of get new revenues out of 5G?

Neville Ray

Yes. I'm not an expert on South Korea, Tim, but we're starting to see material volumes of traffic on their 5G network. We're seeing these use cases; sports, entertainment, as I mentioned, AR, some VR use cases. A whole host of stuff, especially in the kind of the pop culture over there and there's all these new applications and services that are starting to pop up on smartphones. And it's no different if you think about what happened with LTE. LTE, in my opinion, right, one opinion of many, but what did LTE really do? It took video mobile, right. If you go back, we had this vision in 3G of what would happen. But LTE finally gave us networking devices where you had a mobile video experience. So what happened to mobile video? Well, so what? Well, then every social media company, the buying experiences, so much -- there's so much video on smartphones now that never existed. And there's so many innovative new communication capabilities, social networking, everything went to incorporate video. And so video became kind of mainstream. And then of course you had the connectivity and capability and you had companies like Uber and other startup that couldn't exist in really a pre-LTE world. And in 5G, the same thing is going to happen. But it aren’t going to happen until you put a network on the ground. And until developers can come and start to see the richness of that mobility experience. I'm personally very excited about the wearable space. I think that has a lot of opportunity with not necessarily XR, but augmented reality. And we're already testing and trialing industrial use cases believe it or not in our cell sites to help technicians’ commission equipment using the traditional hardhat with an AR capable visor. So early days, but if we can do that in our little space of industry, imagine how many opportunities exist across broader industries, be that oil and gas or medical professionals. There's so many opportunities in the AR space. And then you come to the consumer and ultimately, I fully believe in '21, we'll start to see really lightweight, highly capable AR glasses start to hit the market. They’re going to be small, but over the next four to five years I think that's going to be a big space. And like you mentioned latency earlier on, Tim, right, and so here's latency for you. I want to do something on my phone. I pick it up, I kind of look at it – if I got my mask on, I put in my password and I open the app. And then I do my thing. How many seconds that will take, I don't know, but it was a lot. Imagine if you and I are talking and I've got my AR glasses on and that message just comes immediately into my field of vision. Now you've taken network latency in all its capabilities and delivered it in an experience where you don't have to stare at a piece of glass or take it out your pocket. That's going to be a big, big space as we move through the next four to five years. And if you don't believe me, go and ask the projects that are all going on in Facebook, Apple. They won't tell you much, but they don't tell me much. But there's a lot going on in that space. And I think that's going to be another big wave of transformation in the consumer space. Can't happen in LTE, because the networks aren't fast enough, the latencies aren't good enough, the payloads that you can support, the uploads aren't there. It's going to happen in the 5G space.

Question-and-Answer Session

Q -

Timothy Horan

Neville, I know the end of the year is incredibly busy for you as you do your network planning for next year and everything you need to do. I have about 20 other questions here. I apologize everyone for not getting to them. But, Neville, you covered 90% of what I wanted to cover. I couldn’t talk to you for another four hours as usual. We covered really important points. And once again, congratulations and good luck in next year. And thanks for making the networks a lot better here in the United States. Really appreciate it and have a great holiday.

Neville Ray

All right. Thank you, Tim. You have a great holiday too. Be safe out there everybody. Thank you. Take care.

Timothy Horan

Take care.

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