The U.S. Department of Justice (DOJ) officially cleared the merger between T-Mobile and Sprint, joining the FCC in support of the deal, and bringing the merger one step closer to closing. The DOJ’s settlement comes with stipulations, however, including divesting Sprint’s prepaid business and some spectrum holdings to DISH so that a viable fourth nationwide competitor can enter the market. Additionally, the settlement declares that both operators must deploy high-quality 5G networks for the benefit of American consumers. We’re taking a fresh look at what coverage and spectrum would look like in response to the DOJ’s proposed deal.

Capitalizing on spectrum synergies

According to the consent decree with the DOJ, T-Mobile will keep Sprint’s entire 2.5 GHz and PCS spectrum portfolio, which will be integrated when the deal is finalized. The new T-Mobile will build an LTE layer on a denser cell site grid using Sprint and T-Mobile PCS spectrum synergies in combination with T-Mobile’s 600 MHz, 700 MHz and AWS holdings. This will address the existing capacity demand and expedite the process of allocating most of the 2.5 GHz spectrum assets to 5G NR.

To boost capacity, 2.5 GHz 5G-capable radios will be overlaid on existing T-Mobile sites, and over time, the existing PCS radio equipment will be reconfigured to support additional PCS spectrum coming from Sprint. In many major markets, that spectrum is contiguous to existing T-Mobile assets and will allow for wider allocations and higher spectral efficiency.

Looking closely at the PCS spectrum in top markets, the contiguity between Sprint and T-Mobile is staggering. In markets like Los Angeles, Chicago, Philadelphia and Detroit, adding the Sprint G Block will allow the new T-Mobile to expand the existing PCS spectrum assets and deploy 20 MHz channels. In Miami and Atlanta, the contiguous PCS block is a whopping 30 MHz wide. In markets like Detroit and Dallas, T-Mobile will have two 20 MHz PCS channels. This will enable the new T-Mobile to offer significantly improved capacity while leveraging more spectrally efficient 20 MHz channels. All this additional capacity makes the PCS spectrum a strong candidate for the 5G network.

T-Mobile’s good-faith agreement with DISH will potentially allow T-Mobile to leverage additional unused 600 MHz spectrum licenses, and a similar reconfiguration could be applied to the existing 600 MHz radios — widening the existing 5 MHz and 10 MHz channels — should the leasing agreement with DISH come to fruition.

Since DISH currently doesn’t have an existing network — and it will take them several years to build it — their 600 MHz spectrum licenses are sitting idle, and American consumers aren’t benefiting from that spectrum. T-Mobile and DISH have agreed to an arrangement through which T-Mobile will be able to lease that spectrum and put it to use on its network. The arrangement is mutually beneficial, providing DISH with a revenue stream that could help with their network buildout, and the new T-Mobile with additional spectrum to enhance and accelerate the network transition process.

In some of the top markets like New York City, Los Angeles and Miami, DISH’s 600 MHz spectrum licenses are directly adjacent to T-Mobile’s licenses, creating larger, contiguous spectrum blocks and allowing for wider LTE or 5G channels. In markets like New York, T-Mobile currently runs LTE in the 600 MHz band using only a 5 MHz wide channel, while the other 5 MHz license is idle and likely to be used for 5G, once 5G-capable user devices in the 600 MHz band become commercially available. Adding DISH’s 20 MHz contiguous spectrum block will allow the new T-Mobile to leverage the widest defined LTE channels (20 MHz) and still have 10 MHz available for 5G deployment. This would offer the highest possible spectral efficiency on a frequency band with superior propagation characteristics to the mid- and high-band. In addition, new smartphone designs allowing four separate data streams on the low band have already hit the market, allowing carrier aggregation of two low-band frequencies, or 4x4 MIMO. But more on that later.

What the merger means for coverage

An estimated 11,000 Sprint sites will be retained to improve capacity and/or coverage on the new network. These sites add additional capacity to metro areas and expand coverage to areas T-Mobile hasn’t previously served. The sites will receive support for T-Mobile’s frequency bands, which could include replacement of Sprint’s existing 2.5 GHz equipment. Because Sprint’s existing 2.5 GHz infrastructure has equipment from a variety of vendors, these may be replaced to ensure compatibility with T-Mobile’s single-vendor-per-market strategy.

Integrating tens of thousands of existing Sprint sites will also mean reducing the lengthy regulatory process and will be done on a market-to-market basis.

Merging the networks and migrating customers

The details of how T-Mobile and Sprint will merge their networks are much clearer now than when we last wrote about this potential merger. In order to expedite the migration of Sprint subscribers onto T-Mobile’s network, T-Mobile will bridge the two network cores together by routing the traffic to the T-Mobile anchor network. This will be accomplished through the use of Multi-Operator Core Network (MOCN).

T-Mobile used a similar approach several years ago when migrating MetroPCS CDMA subscribers to the T-Mobile network. The number of Sprint customers migrating to T-Mobile in major metropolitan areas like New York and Los Angeles would be very similar to the number of MetroPCS customers that migrated, according to T-Mobile.

Many customers will not require new devices. A large number of Sprint’s postpaid subscribers carry devices that support T-Mobile LTE frequency bands, including the common PCS band, and will only require an over-the-air software update to enable new features and services like Voice over LTE (VoLTE). This approach will offer immediate improvements in coverage and speed to Sprint subscribers, while freeing up Sprint’s PCS spectrum assets currently used for CDMA voice services.

What to expect from the new T-Mobile 5G network

5G is central to T-Mobile’s commitments to the FCC, including:

Covering 97% of the U.S. population with 5G in three years

Covering 99% of the U.S. population with 5G in six years

Offering in-home broadband nationwide, including in rural America

The spectrum portfolio and combined cell site grid will only improve the existing coverage and capacity, and the addition of Sprint’s 2.5 GHz and DISH’s 600 MHz spectrum assets will ease the transition of Sprint and DISH customers onto T-Mobile’s network. The new T-Mobile will hold around 160 MHz on average of 2.5 GHz mid-band spectrum in the top 100 markets, and potentially as much as 194 MHz. This will allow the new T-Mobile to deploy mobile 5G by layering low-band (600 MHz) and mid-band (2.5 GHz), which has the potential to provide the right balance of coverage and capacity. The excess capacity will be made available for in-home broadband, providing more options in underserved and rural areas. T-Mobile’s existing mmWave licenses will add additional capacity in dense urban areas.

To take advantage of the new T-Mobile’s spectrum and 5G network, smartphones must have the capability to aggregate both Sub-6 FDD and TDD (FR1) with mmWave (FR2), in addition to LTE. We expect to see 5G smartphones with chipsets capable of leveraging FDD low-band spectrum (FR1) become commercially available later this year, which will allow for 5G deployments in the 600 MHz band. This low frequency band can travel farther and penetrate through the walls better, which will allow T-Mobile to offer a nationwide 5G network. Existing 600 MHz LTE radios on T-Mobile’s cell sites are “5G Ready,” which means the network is only a software upgrade away from transmitting 5G throughout the existing 600 MHz footprint.

Also, the world’s first smartphone design supporting 4x4 MIMO and inter-band carrier aggregation on low bands has already entered the market, Sony Xperia 1 although the support for 600 MHz is lacking. We should expect similar designs supporting T-Mobile’s 600 MHz and 700 MHz bands in the future, which could potentially double user throughput, improving signal robustness and elevating the overall network efficiency and user experience.

Selecting Sprint “keep” sites

In conjunction with Speedtest IntelligenceTM data from Ookla®, T-Mobile developed an engineering model for forecasting both congestion and required capacity at the sector level. This model involves collecting KPIs within the radio network infrastructure and has been, according to T-Mobile, highly accurate.

This effort has led to 71% reduction in congestion, while traffic and customer growth have increased over the past several years. The model is also being used to analyze which T-Mobile and Sprint cell sites to keep to enhance the New T-Mobile cell site portfolio based on network coverage, traffic and spectrum available.

DISH, the new fourth competitor

The DOJ’s response to the T-Mobile-Sprint merger also includes structural remedies to enable a viable fourth facilities-based nationwide operator, DISH, to enter the market. Over the past decade or so, DISH has acquired large amounts of mostly mid- and low-band spectrum that hasn’t been put to use. That includes the 600 MHz, 700 MHz, AWS and recently some millimeter Wave spectrum licenses.

The DOJ’s proposed structural remedies are meant to spur DISH to deploy unused spectrum assets, then enter the wireless business as a viable nationwide operator. Allowing DISH to acquire 800 MHz divested spectrum assets after three years — coupled with 20,000 (likely more) of Sprint’s redundant sites that already have the 800 MHz radio equipment and backhaul access available — should help DISH meet the agreed-upon buildout targets to have a facilities-based network by June 2023. Granted, these sites will stay running to support Sprint’s postpaid and divested prepaid legacy customers for at least three years, at which point DISH will have to make some investments for additional adjustments to the sites, such as gNodeB and radio equipment upgrades. After three years, if DISH elects not to purchase the divested 800 MHz nationwide spectrum licenses (penalties apply), T-Mobile will have the option to auction the 800 MHz spectrum at the same or higher cost, or keep it. In addition, DISH will be given access to several hundred retail locations the New T-Mobile plans to decommission.

Considering Sprint’s existing coverage, there is a high probability that these divested cell sites will be mainly concentrated in the metro areas. That said, DISH subscribers will be able to access the new T-Mobile's nationwide network in areas not covered by DISH's facilities-based network for a period of seven years, which should also provide plenty of time for DISH to expand its native network footprint.

Despite the upcoming legal challenges from 14 states, the consent decree from the DOJ is a key milestone in the potential merger between T-Mobile and Sprint. We’ll be watching its progress, using Mosaik research and solutions to monitor coverage and spectrum changes and Speedtest Intelligence to analyze performance.