Welcome to episode 190 of the GTO on 5G. It's the latest insight scoop on everything 5G. We cover six topics in about 20 minutes, and it's brought to you by More Insights and Strategy. I'm Will Townsend, and joining me again this week is fellow analyst Anshul Sag. Let's get started with my first topic, and I want to talk about T Mobile.

And they are planning to invest in fiber services with ambitions to broaden its overall broadband footprint beyond its current 5G fixed wireless access service. And I think we've talked about this on prior podcasts. My friend, this isn't the 1st time that T Mobile has looked at fiber to expand what they're doing from a broadband perspective to States back a few years ago, but the specifics on this, it's a joint venture with an investment company called. 

Equity so equity clever there. And the intention is to acquire  Lumos networks.  And so let me read through some of the stats here. The initial investment is 950M in the joint venture that gives T Mobile a 50 percent equity stake when this closes  and Lumos actually hasn't had a tremendously large footprint.

Excuse me. Over 300, 000 homes with 7500 route miles. But the goal is to dramatically expand that and into the, the, the millions theoretically here. From my perspective, it makes sense. Right now, I think I read a stat that T Mobile may be the 5th or 6th largest home broadband provider in the United States, just given its momentum with its FWA service. 

And I would also view this deal with fiber giving them potential access to backhaul as well. Certainly it dwarfs in comparison to the investments that AT& T continues to make in its fiber that supports not only it's a broadband business, but it's backhaul for its mobile network services. I know you caught this as well.

What are your thoughts? Is this sort of a dual strategy that's my assumption, but what do you think? 

I think that when you look at what T Mobile is doing, it does look a lot like what AT& T was doing. So this might be a borrowing of the strategy. And I think you rightly pointed this out a couple years ago when there were rumors that T Mobile was looking into Fiverr, that it does look a lot like what AT& T is trying to do.

I think it's a good thing, Fiverr is the future. So the good thing is they're not investing in copper. Which I think is a bad investment. And I think fiber will be how most people still get internet in the future. I just think FWA is a really good filler for the places that don't make sense for fiber and having both, I think is the right approach to offering internet services.

I'm an AT& T fiber customer. I literally try to find fiber anywhere that I move, because for me, fiber is like a quality of life thing. I do think it's good for T Mobile to get into this. I think it will broaden their offerings and maybe even have  even more bundling opportunities. And yeah, I just think, I think this is a little bit more focused on the Northeast, if I'm not mistaken.

But yeah, it would be interesting to see how they deploy this nationwide and how it fits into their 5g infrastructure deployment. 

And if T Mobile wants to continue to grow its broadband footprint, it's going to have to add fiber because we've talked about this as well. When you look at the average FWA subscriber and the data load on the network relative to a mobile subscriber, it's like a factor of 10 X, right?

So you get to a point with FWA where you max out what you can do from a capacity and just an overall spectrum perspective. 

If you deploy fiber effectively and do it. With enough density, you can effectively charge the same price.  

True. Yeah. So I think it's a smart move. It codifies what, they've been dealing from kicking the tires and that sort of thing over the last few years.

So it's a big deal and it's a lot of money that they're planning to put into this. Again, yeah, 

I just wanted to have one more thing. Thought just popped in my head. What if  they deploy FWA like they have been, but they use their FWA deployment to figure out where they need fiber to be deployed.

And then they just deploy Fiberware and have the most density of FWA customers.  

Interesting. That could be an interesting scenario for sure.  Yeah, and I was just going to say that again this just provides them, more flexibility. And especially when it comes to backhaul as well, I would assume that's going to help them.

On the mobile, just overall, supporting the mobile network build outs. Yeah, interesting stuff. We'll we'll continue to monitor that. And as things materialize, come back and provide further insights there. But  it's earnings season yet again, and I did see AT& T and T Mobile announced earnings for 1Q and T Mobile has also completed its acquisition of Mint Mobile.

So you want to talk about all of those things. 

Yeah, so we'll start with AT& T earnings. Basically, they still are gaming subscribers, which is good. And they beat expectations. So I think they, they said they added 349, 000 postpaid customers which is a pretty good,  Addition for them.

I believe it's still below what T Mobile had reported, but it's still really good. This is compared to. I believe Verizon's report of losing 68, 000 postpaid customers. So we're even winding Verizon into this, even though we didn't really add them to the list, but they, they did 30 billion in revenue.

They had 3, 000, 3 billion in free cash flow. And they were able to Report that consumer broadband revenues went rose 7. 7 percent to 2. 7 billion. Obviously, their their wireless business is the biggest chunk of that. And I think that was something like 16 billion. But yeah their shares were up and overall, this is just us continuing to agree that AT& T focusing on their core business.

It delivers results. They beat expectations on the postpaid ads. I think everybody was generally happy with those results. And then, T Mobile, on the other side they they added 532, 000.  Customers in Q1. And they said that 75 percent of their customers have 5G devices. They closed the Mint Mobile acquisition as well as the Ultra acquisition.

They talked about the Lumos joint venture which you mentioned earlier. The 405, 000 high speed internet customers Allowed them to cross the FWA subscriber mark, which I really wanted to say in your topic, but I wanted to save it for this 1. And  they had  less than 1 percent post page turn. 

Their total service revenues were 16Billion dollars, which is 4 percent over year and post paid was 12. 6Billion, which is 6 percent year over year. And they updated their guidance to increase. Their postpaid net customer additions, which to they expect to be five point between 5.2 and 5.6, which is an increase from 5.0 to 5.5 and they expect CapEx to be between 8.6 and 9.4 billion. The big thing I think really for most people was, FWA crossing 5 million and them completing the acquisition of Mint Mobile because mint mobile's. One of the hottest MVNOs out there. So I think that's going to be something that we probably see T Mobile kind of  push the gas pedal on and maybe increase promotion to Mint Mobile. 

Maybe there's a chance we get to meet with Ryan Reynolds at some point. We'll see if that actually materializes, but overall  really positive news for T Mobile and AT& T less so for. Verizon, but there was one thing that I noticed, which is that prepaid actually had a net customer loss of 48, 000.

So their prepaid journey is 2. 7%, which is way higher than their postpaid. But prepaid is a lot more fickle of a business.  And also a lot less profitable for the carriers. So it's a little bit less of a focus for a lot of these carriers, they did buy Metro and that's a big prepaid business.

Thanks. And they got to keep that rolling. Otherwise, I do think the 75 percent 5g customers is a big deal because it actually helps them Massively with spectrum allocation, and we'll allow them to sunset 4G spectrum up earlier.  

Yeah,  just my take. From AT& T's perspective, for mobility, relatively flat, I think it was 3 percent growth.

Broadband posted 7 to 8%,  so continues to do well for AT& T and that resulted in some pretty impressive cash flow for AT& T. In addition to the company focusing on a lot of cost down objectives that are, that move beyond just simply reducing ad count and that sort of thing. So just getting more efficient about how they conduct business.

All of that, and in my mind is pretty positive. And then. On the T Mobile front again very strong earnings we've speculated on prior podcasts that, Mint Mobile represents an incremental, set of customers that the company can market to market things like FWA services.

And again, I really like the Lumos JV with this company. And the opportunity that can open up for ARPU and revenue and help grow T Mobile's broadband footprint. So I think for both companies, super, super positive. But with that, hey, my 2nd topic is going to be a little controversial, but got to weigh in on this.

I know you caught the news, but the FCC is reinstated net neutrality and I believe it was a pretty close vote. I believe it was 3 to 2.  and so this reverses what the Trump administration  had had passed in 2017. And the immediate question that comes to my mind is how does net neutrality now that it's been reinstated impact the monetization of 5G network slicing because, At the end of the day, net neutrality is about ensuring, equal access and capabilities and performance for all people.

And what's interesting is I caught it. This is not related directly to this subject, but I did catch an article, that sort of spoke to, and I believe it was light reading that spoke to the fact that the state of California is investigating clear. And it, maybe it was more of a general, periodical, but that the state of California is potentially going to  outlaw, clear because it provides an expedited lane  to people to board their aircraft.

And that's not fair, even though they pay for it. So  there's a lot of focus around, equality and that sort of thing. And I really do think that, hey, net neutrality is an important topic. We need to ensure that folks have equal access to connectivity because it does drive so much economic impact.

But when it comes down to the opportunity with 5G network slicing, being able to define. Discreet slices of, virtualizing, the network with these discreet slices of throughput and latency for specific use cases. I think, this could impact all of that, but what are your thoughts? 

I'm not as concerned.  Okay.  The reason why is because. The telecom companies, AT& T, Verizon, T Mobile. They employ very, a lot of lobbyists.  And I believe that there will be a carve out for fix for network slicing. And I think that carve out will mostly be in the idea that. Network slicing is a service that anyone can subscribe to as a developer.

And I think that will be how they rationalize its existence. Cause I also think when I hear, that this is happening, I'm like, okay, how does this make sense with net neutrality? And in my mind, it's okay, just if you make it a fundamental feature And you do charge for.

For it as a feature and maybe even it actually democratizes access because now they're utilizing less of the network so it can actually offer for a lower cost as opposed to a higher cost. So I believe in the long term and network slicing will actually end up being cost enabling not cost prohibitive and enable new developers to access new markets. 

And I don't think it will necessarily translate directly to something where larger companies are able to pay for something and smaller companies cannot. So I think pricing rules will be a big factor in making network slicing not anti  net neutrality. 

You brought up a very good point.

Making sure that it's application independent. And because I've also heard concerns around hey, what if say a Netflix has favored. Performance for streaming its service. And so this is all 

a service slice and anybody can use it 

exactly. And by the way, Netflix builds out its own content delivery network.

Others use  CDNs from companies like fastly and and others. What it comes down to is just ensuring that this is all application independent. And to your point, allowing developers to, basically freely develop and not limit competition. There are a lot of nuances here.

There's going to be a lot of education that has to occur with politicians and  people in Washington.  But but, yeah, it'll be interesting to see how it all shakes out, but it's early days. And again, this was just this was just ruled on this week. So  I'm sure we'll be talking about this a lot more on future podcasts.

But,  hey, let's go to your 2nd topic and you're going to continue your theme around earnings. And you want to talk about Intel and it's 5G business.  

Yeah, so Intel's 5G business is interesting because they provide both. Processors, but also networking solutions for the industry Intel is not really selling anything directly, but some of their biggest customers are  5G network infrastructure providers like Ericsson.

What's really interesting is during the Intel earnings. They said that. They actually if you look at Intel's earnings the consumer side is actually doing very well for Intel, but the networking side is not doing so well. And they reported that within the industry as a whole, last year ran equipment fell 11%.

This quarter things aren't really much better. And, they're not really getting that much momentum on. V ran and O ran quite yet, so they're not realizing a lot of the the benefits of that, becoming adopted. And I think they have more competition in that space with from AMD and others.

And not to mention, they also have competition from arm. So it's going to be really interesting to see how 5g ran and open ram gets implemented, but ultimately their networking business, which I think you are actually even more familiar with that. I am hasn't really been doing too hot and I've been watching their earnings quarterly and networking has always been a weak spot for them. 

It's also not a gigantic business, so I don't really think it's a, as much of an impact as I think. The data center not doing as well, but it's really interesting to see that the CEO actually called out specifics that, they saw significant declines in the 5g market in Q1 specifically for infrastructure, which makes sense because there if their customers aren't shipping, then there's a inventory build up and then there's less demand for parts and then revenue doesn't get realized, so it definitely sounds the 5G infrastructure slow down is affecting more than just the infrastructure providers, which is not a huge shock. 

Yeah, it's not. There's always a ripple effect here. And there are certainly to your point. There are others in the Silicon business that are, focused on interconnect and that sort of thing and building. Optical components for transport networks as well as the underlying 5G networks.

And until to give it a little bit of credit, it's on a reinvigoration journey here. And Going back and, focusing, refocusing on it's, it's core businesses to your point. A lot of what Intel supports is in Iran  and, there's been a softening there.

That's been very evident. But and then also Intel is focused on building a foundry business where, it wants to build other people's stuff as well, including ships.  Competitors right and then, but also building chips for for Ericsson as well. So it's going to take time  for that ship to get turned around.

But I do think the the potential for Intel is quite bright. They're going to have to execute that and that's been 1 of their challenges over the last couple of years. It's just and the 1 thing I'll 

just add to that is they have been executing. Their products are good. They have a lot of really strong. 

Products coming at the end of this year with. Gaudi three and their sixth generation of Xeons. I think those will do well. They have a lot of competition, but I think it's going to be net positive for them on the product side. And then on the, like you said, on the founder side, it's just going to take time.

It's a very capital expensive. Expenditure and the capital intensive expenditure. And I just think that right now in the short term, it's not going to be beautiful. It's going to be really ugly, but that's just, that's the cost of doing business when you're building foundries. I think the real issue is that a lot of investors are not convinced.

This will be a faster transition. This will probably take, to the end of the decade. And some investors might not be interested in sitting along for that ride, but I think it'll actually happen faster than that. But.  It really depends on, on, on market demand and economics and, how the market ends up, receiving their products and what demand looks like and, there's all so many factors that I, I just think it's a much more long term story, but founders always happen.

They always will be. 

Yeah, it's definitely long tail from an opportunity perspective. And if you look at NVIDIA's journey Jensen and team, they made investments for years. You may maybe even a decade  before they, yeah, before they really moved beyond, providing GPS for gaming, which you're a big fan of.

And now it's powering some of the most massive disruptive next generation generative applications out there. Hey, sometimes it takes time to get to the finish line, but let me hit my 3rd and final topic. And this is near and dear to my heart. I caught this news on reading about Verizon and how they're supporting the New Orleans jazz festival with 4G and 5G capacity and justice just kicked off yesterday and it's going to run through May.

5th. If you haven't been, I highly recommend it. It's obviously very close to where I live in Texas. Lots of great music this year. They've got some fantastic headliners like food fighters and whatnot. But again, this is 1 of my big pet peeves. I know it's a pet peeve of yours as well, because you like to attend a lot of Padres games and  I'm not attending a lot of Astros games because we're not off to a great start this season, but.

But concerts and that sort of thing. 1 of the, F1 in Austin, 1 of the biggest challenges is capacity and flooding these networks on having enough capacity. And then things just start going awry. And basically, what Verizon has done is they're bringing densification all throughout the city, but they're also.

Beyond just bringing the standard, ran equipment, cults and cows and that sort of thing. I found this really interesting. They actually have a portable matsing ball. And if you don't, if our viewers and listeners don't know what a matsing ball is, if you ever go to a stadium or, you go to a very large venue and you see these huge, large globes.

That are hanging that's a matching ball, and it's designed to improve the attenuation of connectivity and improve capacity. And Verizon is actually, they have a mobile version of this. They brought it to jazz fest and it's also supporting my understanding is it's supporting 4G and 5G millimeter wave.

That's not surprising, because Verizon has been very focused on millimeter wave. That was the spectrum footprint that it had initially to build out. And, again, a millimeter wave does some pretty amazing things from a performance standpoint. It just needs a propagation and the densification  with small cells and macro cells to make it happen.

But I just, I wanted to point this out because it's just, it's like. Supersizing, what typically you see at these events when the mobile network operators bring in, the cows and the Colts and the trucks and that sort of thing. And there's go hit light readings website because it's quite impressive to see this thing.

It's on a scissor mechanism that, they're able to raise, pretty high and man, I'd love to, I'd love to find a friend that might be there this weekend to just ask them how the connectivity performance is because. Hey, you want to share that experience when you're at an event like jazz fast with, with the world on instagram and whatnot.

I don't know if you caught the news, but I think it's pretty, it's a pretty innovative. I did not catch this news until you told me about it, but I did catch that. They did  set up Detroit with a upgraded 5G network. For the draft. Ryzen is very busy this week setting up for multiple major events and increasing capacity, which I guess is cheaper than building it out, because, I feel like it jazz fest is in the same place every year.

So I feel like that might be something. That they would just want to build out for eventually what they have for every NFL and NHL game. I wonder what that's about, but I know the draft isn't the same city every year. So that makes sense. But, yeah, cellular is core to the experience for consumers now, so they've got to build that capacity. 

I agree. So a little shout out to rise in there. Hey, so let's wrap things up here. And you want to talk about dish and crown castle and they run a dispute that was just recently settled over 

5g. Yeah, so so basically. Crown Castle, if you don't know, they're one of the biggest tower companies out there.

They lease a lot of their space. They're a co location service, so they let you use their tower space to build your infrastructure. And between them and American Tower, there's pretty much nowhere else to go. So there's, those are your only two choices in terms of Big footprint, so dish was working with them and they had a dispute where dish said that they didn't owe crown 22, 000, 000 in dispute additional rent. 

And they actually counter sued for 35, 000, 000 in damages due to alleged delays. So  there were delays on 1 side and. Disagreement on payment and the thing is that they were supposed to commission 20, 000 sites.  For dish and right now they're somewhere like in the ballpark of 8000. So they're not even half deployed and  it's a 36 year lease term.

So they're not, this is not something that this is not a relationship that's going to, dissolve anytime soon. And the court decided that, That dish was correct in their dispute. So they've won this lawsuit. So we're gonna have to move forward. But it just, this sounds like something where maybe dish was struggling with this issue in getting their network deployed.

And as a result, they, it slowed down their network, which affect network quality. And I think this is just 1 of the things that they've had to deal with as they're trying to roll out their 5G network and struggling to do but it seems like they won the lawsuit and this will just have to move forward and they won't have to pay these additional fees for which is apparently over a working space for National Electrical Code Workers working space.

Outside the footprint. So like dish one, they wanted dish to pay for that space and dish said that wasn't part of the contract. So it's really interesting to see the nitty gritty and the dirtiness of this, relationship, but ultimately dish needs this light leasing space to be successful and we'll see what happens, in terms of how this, works itself out in the future, but Ultimately, there's a question of whether or not DISH will even exist in the near future.

We'll see what happens, but, this will potentially help them move things further along.  But this also sounds like something that, maybe Crown was trying to make money off of DISH and maybe they weren't supposed to. And it sounds like the court agrees. Hopefully this helps, DISH turn a page in their very, very long arduous book.

But I just hope that this ends up being a net positive for DISH and their customers.  

I did too, and, there are plenty of other tower companies out there. Crown castle is the biggest. And but I'm wondering if, they're I don't know. It's. Could bad blood equate to trouble, additional trouble for Dish down the road as they build up their network?

So time will tell because Crowncastle is a very big player in the tower space. But very interesting stuff. It's been another great podcast, my friend. Why don't you take us home? 

Absolutely. We hope our viewers and listeners found this week's topics interesting. If anyone out there would like to provide insights for a specific 5G topic for a future podcast, let us know.

Please reach out to us on social media. Will's at WhaleTownTech, and I'm at Anchal Sarg. We hope you have a great weekend, and please tune in again next week. And don't forget to rate us and subscribe.