NEWS ANALYSIS: T-Mobile, the fourth-largest U.S. carrier, is undergoing a major initiative to reduce the cost of 4G, launch LTE, expand coverage and grow its business offerings.
Perhaps the best thing to
come out of AT&Ts failed bid for T-Mobile was the breakup fee, spectrum
and roaming deals that AT&T had to give T-Mobile as part cost of the merger
breakup. On Feb. 23, CEO
Philipp Humm announced that T-Mobile would launch its Long-Term Evolution (LTE)
network starting in 2012, and would start selling LTE devices in 2013. Humm
said that T-Mobile would be upgrading its existing network, broadening its
coverage using both Evolved High-Speed Packet Access (HSPA+) and LTE, and would
offer its service at prices significantly less than its competitors.
Humm also said that T-Mobile
would be harmonizing its band usage by devoting some of its 1,900-MHz band,
currently devoted to GSM, to HSPA+ and running LTE in its 1,700-MHz band. This
change would not affect current T-Mobile customers since their devices will
already work with the new HSPA+ frequencies, although it would offer less bandwidth
to GSM and 2G users.
Most notably, the change
would make T-Mobiles services on 3G and 4G accessible to the Apple iPhone and
to international users visiting the United States. Humm said that he envisioned
a greater international role for T-Mobile by leveraging its relationship with
Deutsche Telekom and by joining the Free
Move alliance, which allows users to travel between countries without
paying the normal roaming fees. Humm said that the improved international
access was part of T-Mobiles new effort at building the business-to-business
(B2B) part of the company.
Currently, T-Mobile has
about 5 percent of the business market share in the United States, and Humm
said that T-Mobile intends to improve that number.
The move to add enterprise
users will include hiring a thousand new sales staff, and offering dramatically
reduced rates and a number of other services that Humm declined to specify.
Currently, T-Mobile offers a business phone system that allows companies to
leverage T-Mobiles WiFi calling capabilities into making mobile phones
integral to a companys internal phone system.
Humm said that T-Mobile
expects to spend about $4 billion on the expansion and LTE deployment. Humm
also noted repeatedly that T-Mobile USA suffered badly during the period of
uncertainty that accompanied the ill-fated AT&T merger. He said that the
company lost customers and was unable to sign agreements with Mobile Virtual Network
Operators (MVNO), while the cloud of the AT&T deal hung over us.
We have suffered under the
AT&T deal, said Humm.
Of course, the key
announcement was the launch of LTE.
Joining Humm on the press
call, T-Mobile CTO Neville Ray said that the company was deploying a more
advanced version of LTE than was in use by other carriers.
Ray said that T-Mobile would
support data rates up to 72M bps on its network in areas where it has full
coverage. Currently, T-Mobile supports data rates of 42 megabits per second on
its HSPA+ network. In addition, Ray noted that T-Mobiles LTE deployment would
be speeded up by installing integrated radio/antenna devices fed by a fiber-optic
connection. He also said that the fast LTE launch is possible because T-Mobile
had upgraded its backhaul for the HSPA+ deployment.
Humm noted that he doesnt
expect a great deal of customer impact.
Customers are buying 4G,
said Humm, explaining that most customers dont care whether their 4G phones
are using HSPA+ or LTE. However Ray noted that LTE is about 50 percent more
efficient than the current HSPA+, which will allow T-Mobile to improve its
capacity and coverage when its deployed.
Whats interesting about
T-Mobiles announcement is that the company appears to be bouncing back from
the cloud of uncertainty that surrounded it while the merger situation dragged
on. Now that AT&Ts cash is on hand, and now that the spectrum that
AT&T needs will be available as soon as the
Federal Communications Commission approves the transfer, which seems
likely, the company seems to be well-situated to be a major player again.
Whats also interesting is
that this is taking place approximately a year after Humm testified before
Congress and said that T-Mobile cant survive without the AT&T merger.
Apparently, this wasnt exactly the case, but the outcome did show that
T-Mobile needed a piece of AT&T to make things work. Whats not likely,
however, is that AT&T ever thought that T-Mobile would get a piece of it by
extracting it as part of the breakup fee. So in a sense, Humms prediction was
correct, but probably not in the way he expected.
Its also worth noting that
T-Mobile has announced its opposition to the
plan by Verizon Wireless to acquire the spectrum owned by several cable
companies. Humm said that T-Mobile wants some of that spectrum as well, and
that Verizon shouldnt be allowed to have such a concentration of spectrum as
it would have if the deal were to go through. If the wording of the objection
brings back echoes of the opposition to the merger with AT&T, that may not
be a coincidence.
Ultimately, the good news is
that T-Mobile has apparently emerged from the AT&T merger battle stronger
and more competitive than it was when it started. This is very good for
T-Mobile and its customers, obviously, but its also good for the rest of the
industry where competition is clearly critical.
Wayne Rash is a Senior Analyst for eWEEK Labs and runs the magazine's Washington Bureau. Prior to joining eWEEK as a Senior Writer on wireless technology, he was a Senior Contributing Editor and previously a Senior Analyst in the InfoWorld Test Center. He was also a reviewer for Federal Computer Week and Information Security Magazine. Previously, he ran the reviews and events departments at CMP's InternetWeek.
He is a retired naval officer, a former principal at American Management Systems and a long-time columnist for Byte Magazine. He is a regular contributor to Plane & Pilot Magazine and The Washington Post.
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Wayne Rash is a Senior Analyst for eWEEK Labs and runs the magazine's Washington Bureau. Prior to joining eWEEK as a Senior Writer on wireless technology, he was a Senior Contributing Editor and previously a Senior Analyst in the InfoWorld Test Center. He was also a reviewer for Federal Computer Week and Information Security Magazine. Previously, he ran the reviews and events departments at CMP's InternetWeek.
