T-Mobile USA: 3G, Going on 4G?

T-Mobile US Inc. is now expected to launch its long-awaited 3G network service this summer, trotting leisurely in the footprints left by its three larger rivals, AT&T Inc. (NYSE: T), Verizon Wireless , and Sprint Corp. (NYSE: S).

T-Mobile's 3G network has been a long time coming: In September 2006, the operator won Advanced Wireless Services (AWS) spectrum suitable for 3G for $4.2 billion in a Federal Communications Commission (FCC) spectrum auction. The company awarded vendor contracts for the nationwide network at the end of November 2006, saying that it planned to spend three years and more than $2 million on the project. (See The Auctions Endeth, T-Mobile 3G Is Imminent, and T-Mobile Awards 3G Deals.) The operator now says it expects to launch 3G UMTS services over AWS in the summer and cover 80 percent of the top 20 markets in the United States by the end of the year. But AT&T, Verizon, and Sprint are reasonably well advanced with their 3G networks and are already looking at the next generation of wireless broadband. (See AT&T & Verizon to Use 700 MHz for 4G , Sprint Quiet on WiMax Launch Date, and T-Mobile: 700 MHz Wallflower.)

Sprint is expecting to launch proto-4G WiMax services this year. Verizon and AT&T will follow with long-term evolution (LTE) networks in 2010 and 2012, respectively.

T-Mobile gained enough AWS spectrum that it could potentially move along to LTE after UMTS. "I'd imagine they'll be fast followers to LTE," suggests John Hodulik at UBS Research . "The spectrum is not that great for indoor coverage, that's the problem."

This suggests that T-Mobile could continue its convergence strategy of WiFi hotspots at home beyond 3G. The firm is already working with WiFi and could experiment with cellular femtocells as well, Hodulik notes.

Whatever happens, T-Mobile has to add more data to the mix, rather than compete on cut-rate voice plans alone, according to Hodulik. "They need to get out of the cheap minutes game," he tells Unstrung.

T-Mobile offers 1,000 "whenever" minutes for $40 a month. Both the high and low ends of the market are breathing down the operator's neck with unlimited calling plans that range from $100 to $45 a month. (See Verizon Steps Up Unlimited Data Buffet.)

"While T-Mobile is the price leader in voice, we don't expect the company to be as aggressive in data pricing, as profitability is a main focus this year," Hodulik writes in his latest research note on the operator.

T-Mobile hasn't yet found a spokesperson that can answer Unstrung's questions on its 4G strategy. We'll add more on this story when we know more.

— Dan Jones, Site Editor, Unstrung

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