T-Mobile (NASDAQ: TMUS) leaped ahead of the competition with the launch of its nationwide 5G network. While T-Mobile would be the first U.S. Cellular company to launch a next-generation cellular network, many can't help but feel that the move may not deserve all the fanfare that it has been graced with.
T-Mobile's activation of its new 5G network places it ahead of its chief competitors AT&T inc. (NYSE: T) and Verizon Communications (NYSE: VZ), both of which have 5G services, but only in a limited number of locales domestically. T-Mobile's new network covers 5,000 cities, reaching an estimated 500 million mobile customers. T-Mobile claims that its customers will see improved download speeds that will gradually increase over time as the carrier improves the network.
Already, though, T-Mobile has found itself facing detractions as experts pan the network's unveiling. Most notable is the detraction that the ostensible nationwide network is that it only covers 60% of the U.S. population, and only roughly 28% of the nation's landmass. While "Nationwide" coverage, according to the National Advertising Division, the Ad industry's internal regulatory body, is anything that covers at least 200 million of the United States' 329 million citizens. While within advertising standards, the small pockets of 5G advertised by T-Mobile as nationwide are barely a fraction of its impressive and considerably large 4G coverage, which covers most of the continental United States.
As for the performance of the actual network, the speeds are an improvement over T-Mobile's 4G, but not by much. The network utilizes the same 600MHz spectrum as the existing 4G network. The higher-band equipment needed to produce ultra-fast 5G speeds like those seen in major urban areas (where the majority of existing 5G networks currently operate) does not transmit as far as the 600MHz network, and according to T-Mobile itself, may never be deployed on as wide as scale.
For T-Mobile as a company, the announcement has done little for its stock. The lack of excitement for consumers and investors both may be over the lack of phones capable of utilizing the new 5G networks. T-Mobile and its contemporaries plan to release more 5G capable phone models throughout 2020, but as of right now, there is little on the market that can tap into the next-gen network. While T-Mobile as a company is by no means suffering, it's earnings are down since its last quarterly report, and the 5G reveal could have helped give the carrier a healthy boost to negate any quarterly losses.
Despite the faults noticed in the launch, T-Mobile still benefits greatly. The foundation for an improved network has already been laid, which may allow the company to roll out its 5G networks to more locations in the U.S. at a far more rapid pace than its competitors. Even though the network currently barely surpasses 4G speeds, its operational status may allow T-Mobile to roll out improved speeds more quickly. Unveiling its network early also serves as a sound move for the company's publicity, which could bring more consumers to T-Mobile to take advantage of its existing 5G network once more budget-friendly 5G phones reach the market.