There is no denying T-Mobile USA, in its latest advertising campaign, is dissing AT&T (s T) for what it believes is lack of fastest wireless broadband. And it is not just AT&T. As T-Mobile USA’s CTO Neville Ray points out, his company has an edge over Sprint (s S) and Verizon Wireless (s VZ); in his opinion, his HSPA+ network is a better option than the coming U.S. LTE or WiMAX networks.
Ray was talking to me ahead of the launch of new markets and availability of new devices for its HSPA+ network. The company launched a marketing campaign, which describes its HSPA+ network as 4G. (For the record, I don’t buy HSPA+ is 4G argument at all.)
“Today, we have the most pervasive 4G network experience compared to any of our competition,” Ray said. ”Our competitors have ambition to reach 100 million covered POPs with LTE or WiMAX by the end of this year.”
WiMAX: What’s That?
Verizon is planning to launch is LTE network relatively soon, and Sprint has already launched WiMAX-based networks using the Clearwire (S CLWR) infrastructure. “We see in most market situations we are toe-to-toe or better than the performance from the WiMAX networks, and WiMAX devices.” Ouch!
Ray said that in tests their HSPA+ network has been going toe-to-toe with WiMAX in terms of performance. “In many markets we’re actually beating that performance,” he said. For now, HSPA+ has theoretical capability of 21 megabits per second, and the speeds go up 42 Mbps next year. To average customers, he said that the company was “seeing peaks in the north of 10 megabit per second range.”
Of course, there aren’t as many users on the T-Mobile HSPA+ network, but Ray pointed out the network is outperforming AT&T’s. “We are certainly delivering much better speeds across a broader geography, and it’s a much higher and faster speed performance than what’s out there from the HSPA devices that we’ve carried ourselves and that AT&T is carrying today,” he said. Apple’s (s aapl) iPhone is one of the HSPA devices currently on AT&T’s network.
LTE, a Late Bloomer
In our conversation, Ray noted there is a very good chance that U.S. consumers will be disappointed by the LTE roll out, mostly because Verizon and AT&T don’t have enough spectrum.
“Our competitors are launching LTE in fairly limited bandwidths of spectrum,” he pointed out. “So, 10 to 20 megahertz of LTE spectrum doesn’t give you a significant benefit in any manner, or form, from a performance perspective over and above HSPA+.” In comparison, European carriers are being more generous with the spectrum devoted to LTE.
Another big challenge, he said, is that there will be a lack of early LTE devices, and most of them are going to be either data sticks or embedded modules in tablets and portable computers. “You’re not going to see much from an LTE perspective in smart phones,” he said.
“That’s in direct contrast to what we seen from HSPA+, where we’re working off of a more mature and developed device ecosystem in HSPA,” Ray said. “It’s going to take some time before LTE will offer anything approaching the device choice that’s available in HSPA+.” That is one of the main reasons why T-Mobile USA is backing HSPA+ as its next generation wireless broadband technology.
The Spectrum Advantage
For a very long time, T-Mobile USA suffered from spectrum shortage. The company has since rectified that aggressively accumulating spectrum, especially what’s known as the AWS spectrum. “We have clean, uncluttered, untouched spectrum that we can leverage to support growth in smartphones and other devices into over the coming months and years,” Ray said. T-Mobile USA, he continued, has used only about a third of about
6030 MHz of spectrum it acquired for roughly $2.64 billion in the 2006 AWS auction. This gives them ample room to upgrade to 42 megabit per second capability next year, Ray pointed out.
AT&T, too, bought spectrum in the AWS auction, and it also recently acquired spectrum in the 700 MHz range, but none of it is being used and it’s reserved for LTE, he noted, adding, “It is going to start to touch their customers late in 2011, and LTE won’t touch many of their customers until 2012 and 2013.”
Nevertheless, there’s no doubt that T-Mobile USA will be looking for more spectrum. “Everybody needs more spectrum. Everybody in the U.S. is going to struggle from a spectrum perspective at some point in time over the next five years,“ said Ray.
His bet is that his rivals struggle more than his company – and there lies the big opportunity for T-Mobile USA and HSPA+.
In Part I of this conversation, Ray discussed the importance of devices and how they spur consumption, along with pointing out that the bar is high for Nokia and RIM.
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