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T-Mobile Seen Benefiting From AT&T, Verizon Delay on 5G

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(Bloomberg) -- T-Mobile US Inc. could benefit from a delay in rolling out 5G service announced Thursday by its chief competitors in response to concerns over interference with aviation equipment.

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AT&T Inc. and Verizon Communications Inc. said they would push back to Jan. 5 the debut of their 5G service on some airwaves after U.S. aviation regulators said it might interfere with aircraft electronics.

“Today Verizon and AT&T announced that they will voluntarily pause commercial launch” of the service “to further assess any impact on aviation safety technologies,” the Federal Aviation Administration and Federal Communications Commission said in a joint statement.

The move represents a hitch in the mobile providers’ pursuit of 5G airwaves to serve billions of connected homes, factories and gadgets with the latest generation of technology. AT&T and Verizon are in a race to catch up to T-Mobile US, which is about a year ahead on 5G network deployment using other airwaves not suspected of causing interference.

The delay helps T-Mobile lock in 5G customers before Verizon and AT&T have improved their coverage, Blair Levin, an analyst with New Street Research, said in a note.

“A one-month delay will not have a material impact,” Levin wrote. “But the question remains whether the delay will continue to a point at which it will hurt Verizon and AT&T while benefiting T-Mobile.”

The delay provides time for U.S. agencies to complete discussions about the airwaves, known as the C-Band, Rich Young, a Verizon spokesman, said in an email.

“This will allow us to remain on track to bring the 5G services using the C-Band to 100 million Americans in early 2022,” Young said.

Verizon and AT&T announced the delay following a warning the FAA issued to aviators on Tuesday that “action might be required to address potential interference with sensitive aircraft electronics” from new service on the C-Band airwaves.

The FAA bulletin said pilots should remind passengers to place any 5G device into airplane mode or switch them off during flight, and to notify the agency of any signs of interference.

The 5G spectrum is near radio signals used by radar altimeters, devices that measure how close an aircraft is to the ground.

Radar altimeters are used on planes and helicopters for multiple critical safety functions, including landing when visibility is low, anti-collision warnings and systems that warn pilots when they inadvertently get too low. Some commercial helicopter flights can’t operate without a working radar altimeter.

The FAA bulletin said there have been no confirmed reports of interference and wireless carriers have expressed doubts about the potential for problems. Nevertheless, Canada recently imposed restrictions on locating new 5G cell towers near the runways of large airports. Australia, France and other nations have taken steps to limit the chances of aircraft interference.

Mobile carriers have permission to use the C-Band beginning Dec. 5. The FCC awarded wireless network providers access to the radio bands in a February auction. Verizon spent $45 billion on the airwaves in question, and AT&T devoted $23 billion in an FCC auction.

T-Mobile has a huge swath of licenses in the 2.5 gigahertz range that is clear of the conflict.

“This is a clear win” for T-Mobile because delay keeps rivals from matching its airwaves holdings, said Walter Piecyk, an analyst with LightShed Partners LLC., in a tweet.

RTCA Inc., a Washington-based nonprofit that studies technical aviation issues, in a report last year concluded that the potential for interference created a safety hazard. It found “significant impacts throughout the approach with the potential for catastrophic effects.”

In comments to the FCC, aviation industry representatives have said that it would take years to develop new standards for radar altimeters and then replace or upgrade them.

On Thursday, the FAA and FCC pledged to “continue to coordinate closely to ensure that the United States keeps pace with the rest of the world in deploying next-generation communications technologies safely and without undue delay.”

A4A, a trade association of airlines, thanked the agencies for working on the issue.

“We are grateful for the ongoing coordination efforts of the FAA and the FCC as they work toward a practical resolution that prioritizes safety and mitigates disruption to the aviation system while allowing for the implementation of 5G services,” the group said in a statement.

(Updates with Verizon statement in the seventh paragraph.)

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