No hurry for LTE as T-Mobile outlines comeback plan
Admits it will need more spectrum, but may be waiting to get best terms from Clearwire
Published: 20 January, 2011
T-Mobile USA is in no hurry to deploy LTE, though it is looking for spectrum partners, and is determined to get "more aggressive" in the market. These were the key messages from an investor conference held by the German owned cellco, with new CEO Philipp Humm saying 2011 would be an "inflection point" when the carrier would grow again and "get back its roots as a challenger".
Rene Obermann, CEO of TMo's parent Deutsche Telekom, said he expected the unit to turn itself around this year and make $3bn in revenue by 2014, as well as setting churn reduction targets of 2% this year and 1.8% in 2012.
This will be done without the help of LTE, it seems. The company said it would not deploy the 4G system for several years, until "devices are readily available and once device quality is on a par with the HSPA+ network." TMo has been on an aggressive program of upgrading its 3G network to the 42Mbps flavor of HSPA+, putting it ahead of AT&T, and it has courted controversy by marketing this capability as '4G', causing possible confusion with Verizon's LTE and Sprint/Clearwire's WIMAX. Humm was undeterred by criticism of his advertising approach, and indeed repeated the claims, saying: "We are the 4G market leader" and showing off new TV ads. He said TMo would release 25 new HSPA+ smartphones this year including the Samsung Vibrant 4G and Motorola Sidekick 4G. AT&T has promised 30 '4G' smartphones this year, spanning LTE and HSPA+, though it is only supporting the 21Mbps version of the 3G extension standard, while its smaller rival plans to follow Australia's Telstra up to 84Mbps in 2012.
At face value, TMo appears to be pursuing the same cautious strategy towards new networks that Deutsche Telekom adopted when 3G was new, of refusing to be in the first wave of deployers in most markets, instead waiting until devices were plentiful, equipment cheaper and teething problems addressed. Although the carrier is carrying out LTE trials in some countries, it will rely on HSPA+ as its main mobile broadband network for years to come.
However, there is a more complex agenda behind the firm's US strategies because of its spectrum shortfall compared to its three larger rivals. This limits its options and makes it highly likely it will either form an MVNO and/or spectrum sharing deal with a major holder, most likely Clearwire or LightSquared, or purchase new frequencies. This might then alter its timelines for introducing LTE alongside HSPA, especially in urban hotzones. Humm and Obermann both admitted the 54MHz the cellco holds in core markets is enough for now, but will need supplementing in future through purchase or partnership - something Obermann said would be funded by selling "non-core assets" such as towers.
TMo has been persistently linked with both Clearwire and LightSquared, and is probably playing one off against the other and waiting until the price of a deal is right, and until regulatory question marks over the latter's satellite/terrestrial spectrum are addressed. A new spate of Clearwire speculation arose this week, with a Reuters report that the WiMAX joint venture was seeing "dwindling" interest in the excess spectrum it plans to sell, leaving TMo as the main likely bidder.
Pages: 1 | 2