T-Mobile CEO again rejects MVNO idea
Twice since early March, T-Mobile CEO Gopalan has been asked the same question by analysts, and he responded the same way twice.
T-Mobile rejects MVNO idea. | Image by PhoneArena
Early last month, we told you that T-Mobile CEO Srini Gopalan shot down the possibility of T-Mobile partnering with satellite firm SpaceX to start an MVNO. For those of you who don't know what an MVNO is, it's a Mobile Virtual Network Operator, which means that it does not own any cell towers, spectrum, or any wireless infrastructure.
T-Mobile CEO Gopalan faces questions about a T-Mobile-Starlink MVNO
An MVNO sells wireless service to its customers by purchasing it from a Mobile Network Operator (MNO) like AT&T, T-Mobile, and Verizon, and selling to the public at a higher price. Most prepaid wireless providers that are not a unit of an MNO (like Verizon's Visible) are MVNOs.
The rumored T-Mobile-SpaceX partnership was first discussed at the Morgan Stanley Technology, Media and Telecom Conference in March. At the time, Gopalan said that T-Mobile only gets involved with an MVNO when there is an incremental market share to try and pick up.
T-Mobile twice said that such a partnership is not in the works
The executive said that there could be a certain distribution channel, like cable, a market that T-Mobile has entered. The carrier's CEO also said that it considers getting involved in an MVNO when there is an opportunity to target a specific population, like an ethnic group.
What company would you like to see T-Mobile partner with for an MVNO?
Gopalan said that it wasn't clear to him how a partnership with SpaceX resulting in an MVNO would meet either criteria. Fast-forward a month ahead to present day, and it seems that analysts have an obsession with the idea of a T-Mobile-SpaceX MVNO.
T-Mobile teams up with Starlink for T-Satellite. | Image by T-Mobile
On Tuesday, during T-Mobile's first quarter conference call following the Q1 earnings release, LightShed Partners' Walter Piecyk asked once again about a possible T-Mobile-SpaceX MVNO. But Walter had a pretty good reason for asking as the carrier had earlier that day announced its SuperBroadband business service.
T-Mobile partners with Starlink for T-Satellite and SuperBroadband
SuperBroadband is a 5G fixed wireless access (FWA) service for businesses that aims to be operational 100% of the time. As a result, T-Mobile uses Starlink, a division of SpaceX, to provide backup connectivity from the sky in case T-Mobile's wireless network goes down. In a press release announcing the service, T-Mobile said that "5G and Starlink work together to keep organizations online through virtually all outages and disruptions."
The carrier is already booking business for SuperBroadband with companies in hospitality, retail, healthcare and the oil and gas sectors signing up for service. The carrier says that the footprint for SuperBroadband effectively reaches every business location in the nation.
Cable is not something we're interested in. We see our strength as attacking incumbents rather than becoming an incumbent. We see a huge opportunity to attack incumbents across fiber and FWA. That’ll be our key play.
Srini Gopalan, CEO, T-Mobile
Both times that Gopalan answered the question, T-Mobile's CEO made sure to point out the difference between T-Mobile and Starlink's Direct-to-cell (D2C) service, and SuperBroadband. As noted, the latter uses Starlink as a backup if the T-Mobile 5G network goes out.
D2C delivers connectivity to 4G/5G smartphones in areas where cellular service is not available. Known as T-Satellite, users can send and receive texts, share their location, text 911, and use a limited number of apps optimized for the service.
T-Mobile Combination with Deutsche Telekom would create the highest valued telecom company
T-Mobile's CEO says that T-Satellite, used mostly in national parks, has yet to see the usage that it had expected from the service. Still, he gives his company a pat on the back for being the category creator. He also shot down speculation that T-Mobile is interested in buying a cable company.
Recently it was discovered that T-Mobile's majority owner, Deutsche Telekom, has been in discussions with the U.S. company. The plan would create a holding company in Europe that would buy all T-Mobile and Deutsche Telekom shares. Not only would it be the largest M&A (Mergers & Acquisitions) deal in history, but it would create the highest valued telecom company in the world topping China Mobile.
At the time these talks were announced, Deutsche Telekom shares were valued at only 15 times earnings while T-Mobile was trading at 20 times earnings. The transaction, if completed, would eliminate Deutsche Telekom's discount.
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