T-Mobile announces LTE, prepares to take the US wireless market by storm

Yesterday, T-Mobile USA made a very bold announcement during the Deutsche Telekom press conference for fiscal year earnings. T-Mobile USA will be making a massive network upgrade across its footprint throughout 2012 in order to launch LTE in 2013. The clincher? The upgrade was made possible by the AWS spectrum that T-Mobile will receive from AT&T due to the breakup of the agreement for AT&T to acquire T-Mobile USA. And a large chunk of the cash used to pay for the upgrade came from the breakup fee, too.

According to T-Mobile, this upgrade comprises of a three-phase process: free up 2G spectrum, move HSPA+ to formerly 2G spectrum, and deploy LTE on formerly HSPA+ spectrum.

The first phase basically means that areas with low 2G GSM usage will get 2G GSM allocations cut in order to make room for HSPA+. In the last two years, 2G GSM usage has dropped dramatically across the board. Because of this, T-Mobile is finally able to begin the process of retiring 2G GSM. During this phase, old 2G GSM equipment and some 3G equipment will be replaced with new multi-mode equipment that supports 2G GSM, HSPA+, and LTE. In markets that were upgraded to HSPA+ in 2011, no replacement of equipment will be required, since the new multi-mode equipment has already been deployed. Backhaul (connections to the internet) upgrades may be required even in areas that already have the new multi-mode equipment.

The next phase involves reconfiguring cells (base stations and towers) to transmit and receive HSPA+ on both AWS (1.7GHz/2.1GHz, the band currently used for HSPA+), and PCS (1.9GHz, the band currently used for 2G GSM). In this phase, T-Mobile will free up about 10-20MHz of AWS for deployment of LTE, if it is necessary. In many markets, there will already be room available for LTE on AWS, so no additional steps would be required during this phase.

The final phase is actually the simplest one. The new equipment that T-Mobile is using for HSPA+ and LTE deployment supports remote software upgrades and reconfiguration. A network upgrade patch would be sent out to all stations with the new equipment, instructing cells to begin transmitting and receiving LTE on the AWS band. It is because of this that T-Mobile will be able to deploy LTE very quickly to a large portion of its native coverage once all the old equipment is replaced. It is also quite likely that Voice over LTE (VoLTE) and Single Radio Voice Call Continuity(SRVCC) will be supported on T-Mobile’s LTE network right from launch.

So what does this mean? Well, depending on who we’re talking about, different benefits will become immediately clear.

For users, it means any T-Mobile subscriber (or potential subscriber) could purchase an AT&T or T-Mobile device and use it on the high-speed network. That includes the iPhone. While an iPhone that supports AWS HSPA+ is ideal, the reconfiguration of the T-Mobile network for PCS HSPA+ is the next best solution.

Additionally, an LTE iPhone that works on AT&T’s LTE network will work just fine on T-Mobile’s LTE network as well, since AT&T and T-Mobile share frequencies for LTE. LTE devices from Cricket, MetroPCS, C Spire Wireless, and U.S. Cellular will work on T-Mobile’s LTE network. Future LTE devices from Verizon Wireless may include support for AWS LTE and may also work on T-Mobile’s future LTE network.

Also, the wide range of devices available all over the Americas and in Europe will now work on T-Mobile’s HSPA+ network. The Americas are largely unified on the same frequencies as AT&T, with the exception of the few AWS 3G networks in Canada, the US, and Peru. In Europe, nearly all top-grade LG and Samsung smartphones/tablets (many of them never get released on a US carrier) have support for PCS HSPA+. Most popular international unlocked smartphones and tablets will now work on T-Mobile’s HSPA+ network instead of falling back to 2G.

The end result of this is that devices will become much cheaper very soon. T-Mobile is set to take advantage of the massive ecosystem built up around PCS HSPA+ and AWS LTE. This is a big win for both T-Mobile USA and T-Mobile subscribers. Both the subscriber and the carrier will save quite a bit of money on purchasing devices in the future. Considering the fact that T-Mobile has the cheapest plans of the national carriers, this new upgrade makes T-Mobile highly attractive to potential subscribers.

For companies wanting to become MVNOs (Mobile Virtual Network Operators, who are carriers that do not run their own networks and rely on existing ones), this announcement means that T-Mobile is the ideal choice as a network partner because nearly all GSM devices will work on the T-Mobile high-speed network. MVNOs can choose to make SIM-only offerings and/or offerings with T-Mobile branded devices. But, now they could also choose to make offerings with MVNO-branded devices very easily as well.

For smaller US carriers deploying LTE, it means that they now have a viable option for roaming deals that would be willing to negotiate a fair price for national roaming. T-Mobile USA is easily the best choice for smaller carriers who want to be able to offer national 4G roaming coverage. Many small carriers may not even be able to deploy 4G, and could negotiate agreements with T-Mobile USA to allow their customers to use T-Mobile’s network.

For international network operators, they now can negotiate with Deutsche Telekom and T-Mobile USA for fairer roaming deals compared to the ones they may have with AT&T and Verizon Wireless. T-Mobile USA is particularly more appealing because its new band plan is aligned well with the major carriers in Canada (who use PCS for HSPA+ and AWS for LTE, too) and Latin America (who use PCS for HSPA+). A national carrier that offers a simple band plan for one of the largest markets in the world makes it easy for international carriers to offer roaming to the US, which is very important for business customers.

The move to PCS HSPA+ and AWS LTE by T-Mobile USA is definitely the best choice. By offering a highly advanced, compatible, and expansive network with excellent rate plans and devices, T-Mobile USA is poised to take the wireless market in the United States by storm.

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AT&T’s T-Mobile Plan B: Buy everything else

AT&T was unable to acquire T-Mobile USA from Deutsche Telekom AG. Even while the transaction was still in progress, many people were wondering what AT&T would do if this situation occurred.

The fact of the matter is AT&T was ready the entire time. Over the course of 2011, AT&T quietly set up the pieces for its fallback plan. AT&T quietly began talking to various other owners of 700MHz licenses and negotiating the terms of acquiring their licenses. Throughout 2011, AT&T attempted to quietly introduce the intent to acquire these licenses to the FCC so that AT&T would have a better chance of actually buying the licenses from their current owners.

In case you are wondering, the 700MHz spectrum was a large chunk of the former analog television spectrum. When the United States shifted from analog to digital television, that spectrum was freed up for the FCC to reassign for use for other wireless technologies. This spectrum is known as the U.S. Digital Dividend spectrum. Most just refer to it as the 700MHz spectrum. The FCC repurposed the spectrum for mobile broadband usage, and auctioned it off to various companies.

Now with LTE deployment kicking into high gear, AT&T needs spectrum to replace what it could have gained with the acquisition of T-Mobile USA. Fortunately, AT&T planned ahead and started the process to buy more spectrum from other companies.

The request to acquire Qualcomm’s 700MHz spectrum is the most well-known, but it wasn’t the first one the FCC accepted from AT&T. The first one was for six licenses in southeast Pennsylvania from D&E Investments, Inc. Qualcomm’s spectrum came after. Then, the request to acquire two licenses in eastern Washington from the Whidbey Telephone Company was accepted. Next, the request to acquire one license for a single county in Massachusetts from 700MHz, LLC was accepted. Finally, the request to acquire twenty-two licenses in southern Minnesota and southern Wisconsin from Redwood Wireless Corp. was accepted. With the exception of the Qualcomm spectrum, all of it was small regional slices of spectrum that lived on AT&T’s frequency band. Most of these licenses are in areas that AT&T has little to no 700MHz spectrum. All of these companies have either never used or are no longer using their spectrum too.

However, the Qualcomm spectrum acquisition was different. That spectrum comprised of 6MHz of unpaired spectrum (that is, only a single frequency range rather than a pair of frequency ranges for the band) nationwide and some additional 6MHz of unpaired spectrum in five major metro markets. This spectrum was originally used by Qualcomm’s defunct Flo TV service. Now it sits unused. AT&T wanted to acquire the spectrum and bond it to its current spectrum for LTE to create a new frequency band that would have boosted downlink (tower to device) capabilities. The idea was that AT&T could boost the download speeds of LTE even further beyond normal with additional downlink channels. Since most users download way more than they upload, AT&T felt that it would be a good fit for its LTE service.

The problem with creating a new band is that the regional carriers that do plan to operate LTE networks would no longer be able to roam on AT&T’s network. Most regional carriers hold 700MHz licenses, so their devices are implicitly compatible with AT&T’s LTE network on 700MHz. Additionally, this acquisition (along with all the others) would make AT&T the largest holder of sub-1GHz spectrum licenses, which worried a lot of the smaller carriers. The FCC aimed to resolve these concerns when itapproved the purchase of the Qualcomm spectrum by AT&T last week. The order approved the purchase as long as AT&T did not create a new permanent band configuration from its usage of the spectrum. The bonding had to be optional so that smaller carriers’ devices can roam on AT&T’s network without requiring extensive modifications to their devices.

In the end, the approval was likely geared as a consolation prize for failing to acquire T-Mobile USA. AT&T will do just fine going forward because it will soon gather enough 700MHz spectrum through acquisitions to deploy high-performance LTE. It’s doubtful that the FCC will block any of the remaining spectrum acquisitions that are pending approval. We can also expect AT&T to try to acquire more 700MHz spectrum from other companies in order to beef up its assets on that band.

Even if that’s not enough, AT&T still has a lot of other unused and underutilized spectrum it already has that it can use to fill in the gaps of its LTE network. For example, AT&T has at least one tabletand one phone coming down the pipeline that supports LTE on the 850MHz band that AT&T owns licenses for. The band, being currently used in South Korea for LTE, opens new roaming opportunities for LTE users in the two countries (if AT&T decides to use that band for LTE too).

If nothing else, you can be certain that the FCC will make sure that AT&T will continue to play nice and keep its LTE network interoperable with everyone else, no matter what.

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AT&T calls off bid for T-Mobile, is Sprint its next suitor?

Communications company AT&T announced today what everyone already knew: Its deal to acquire T-Mobile from Deutsche Telekom is dead in the water. Facing serious challenges from the FCC and the Department of Justice, AT&T decided it was time to throw in the towel, a move that is going to cost them $3 billion in cash and $1 billion in spectrum that it has to hand over to T-Mobile. These costs were part of the safety net built into the deal as a contingency plan for this exact scenario.

Both the FCC and the DOJ cited concerns about lack of customer choice, higher prices and poor customer service as the reasoning behind why the deal should not be allowed to move forward. Of course, it all boils down to the almighty dollar. If the deal had gone through, rival Sprint stood to lose serious ground in the mobile market wars. Instead of being a somewhat close third to Verizon and AT&T, it would end up dead last and in a precarious position since it would be far and away the smallest mobile provider in the country. Hence the fact that Sprint poured resources into a heavy lobbying campaign to kill the deal. But did Sprint have a different motive altogether? Say, to purchase T-Mobile itself and solidify a foothold in the industry?

It makes sense on paper, and is something that Sprint and T-Mo have talked about before. It’s a deal that has the same makeup of the now-defunct merger proposed by AT&T: Sprint needs the customer base and T-Mobile desperately needs mobile spectrum space to roll out a true 4G network to remain competitive. Couple this with the fact that Deutsche Telekom is going to offload the company one way or another, it could be a brilliant move for the Overland Park, Kansas company. It would certainly be more palatable to the FCC and DOJ, since merging the third and fourth largest companies will still leave three major telecom providers, ensuring competition.

There is a major hurdle to overcome however, and it’s one that Sprint has dealt with before and is still stinging from. Namely its acquisition of Nextel and the fact that its network was not compatible with the push-to-talk giant. Handled poorly from start to finish, Sprint shed 47% of its market value due to the fact that it couldn’t manage the two networks successfully. It’s a loss that the company has yet to recover, and has led to Sprint announcing that it is phasing Nextel out completely by 2013. T-Mobile uses a GSM network, making it also incompatible with Sprint’s CDMA backbone. The last time the two companies talked, this was the major sticking point for a deal moving forward.

However, this time around could be different, with Sprint being rumored to be ditching WIMAX for LTEin the near future and T-Mo exploring LTE options as well. Could a well-managed merger between the two companies help to fund a move into the LTE standard?

Read more at CNN Money

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