T-Mobile (NASDAQ:TMUS) Claims Verizon Would Need $1.5 Trillion For 5G Rollout

Mouss Kleindler - August 7, 2019

T-Mobile (NASDAQ:TMUS) executives have claimed that Verizon Communications’ (NYSE:VZ) trouble is that it only has mmWave spectrum to use for 5G rollout. But that would not be viable, T-Mobile thinks, if Verizon’s goal is to deploy 5G across the nation.

If Verizon attempts a nationwide 5G rollout using mmWave, then it would need $1.5 trillion to do it, T-Mobile CEO Legere claimed. However, Verizon doesn’t have that much in its bank account. And it may be difficult for it to raise such a huge sum, say through loans. Verizon finished the second quarter with around $25 billion in cash reserve. The company has been trying to cut costs as it seeks to raise funds for its 5G rollout project. Verizon’s cost-cutting ways have included staff layoffs and shut down of nonessential operations. The company is aiming to slash its annual costs by $10 billion by 2021.

T-Mobile executives launched the attack on Verizon’s 5G strategy after their deal to merge with Sprint secured regulatory approval. The DOJ last week issued the greenlight for the T-Mobile-Sprint merger to proceed after the company made certain concessions.

The merger with Sprint will give T-Mobile access vital spectrum that will greatly boost its 5G rollout project. If fact, T-Mobile CEO Legere has said the company has all the spectrum it needs for a nationwide 5G network deployment. The executive spoke at T-Mobile’s second quarter earnings call. He went on to suggest that none of their competitors currently has the right spectrum combination for 5G. That was the conversation that led to the executive claiming that Verizon’s 5G strategy is stranded.

Verizon aiming to cover 30 cities with 5G

What exactly does Verizon mean when it talks about having a secret 5G plan? Firstly, Verizon sees no obstacles to its 5G strategy as claimed by T-Mobile executives. If the issue is mmWave, the Verizon has hinted it has many ways to go around that problem. Verizon’s network chief, Heidi Hemmer, says the company could use spectrum currently allocated for 2G and 3G for 5G deployment. If Verizon can reassign the spectrum for old technologies, then it shouldn’t have a big problem rolling out 5G nationally. Verizon is aiming to cover 30 cities with 5G by the end of this year. It has so far reached nine cities.

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