MetroPCS circles back to 3G data

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MetroPCS circles back to 3G data

Adds EV-DO capacity to about 20% of its network to serve non-LTE customers, but needs more spectrum

By CAROLINE GABRIEL

Published: 19 September, 2011

READ MORE: Spectrum | US | 1XEV-DO | LTE

MetroPCS hit the headlines for leaping straight from a 2G network to LTE without a 3G stepping stone, but now the US flat rate carrier is circling back to the EV-DO data upgrade for its CDMA network.

The company narrowly beat Verizon Wireless to become north America's first LTE operator, though its 4G strategy is far less ambitious than its larger rival's because it is restricted to narrow bands with associated data rate caps. But it is seeking to harness its limited spectrum stores as flexibly as possible to augment data capacity, even adopting the quirky option of a 3G add-on after almost completing an LTE roll-out.

Speaking at last week's Bank of America Merrill Lynch conference, the carrier's CFO Braxton Carter said MetroPCS will overlay EV-DO Rev A over about one-fifth of its CDMA network, in the areas of highest traffic, in order to support faster data rates for customers without LTE handsets. Although LTE remains its key focus for mobile broadband, the company has a large low income customer base for its flat rate offerings, and Carter said many cannot yet afford LTE devices, which remain premium items. Since MetroPCS is a prepaid carrier, most of its phones carry little or no subsidy to the consumer.

"We're in a grace period," Carter told the audience. "We're putting a lot of smartphone activity onto a CDMA network. Between last year, this year and next year, we'll have almost $1bn deployed in an LTE network. We really can't start putting a significant amount of our customers onto that LTE network-which will bring a lot of efficiencies to us-until the ecosystem develops where we have affordable LTE handsets. But the good news is a lot of the investment is already behind us. The bad news is we're in this transition period."

Carter believes the tipping point for LTE handsets is a cost of $200 to the carrier, but he does not think phones will be available at that level until late 2012, whereas most CDMA handsets on the market are now EV-DO capable and come at all price ranges. MetroPCS has pushed Android smartphone prices down below $130 in many cases and seen significant transition from its featurephone base.

MetroPCS has performed magic tricks in terms of squeezing greater data capacity into its spectrum but it knows it needs to acquire more frequencies and/or a wholesale partnership (it is lined up to use the LightSquared system, should that finally get clearance). It uses the same PCS and AWS spectrum for all its networks, so deploying EV-DO carriers means trade-offs - switching off CDMA 1X voice carriers or reducing LTE capacity. "Our number one strategic priority is to acquire more spectrum," Carter said.