March 10, 2014
T-Mobile is poised to get its hands on 700MHz 4G spectrum from Verizon later this year that it says will enable it to offer better in-building, suburban, and rural coverage over time.
The 700MHz A-Band spectrum that T-Mobile US Inc. bought from Verizon Wireless for $2.4 billion this January was a main topic for executives from the carrier at the Deutsche Bank Media, Internet & Telecom Conference Monday. (See T-Mobile Spends $2.4B on Verizon Spectrum.)
"We're very confident we'll close in Q2... So we can start offering service within the year," said T-Mobile CTO Neville Ray. " 'Fifteen will be a much larger year than 14 but we'll get started in 14."
The 700MHz A-Band spectrum will allow T-Mobile to improve in-building coverage in dense urban areas and add coverage in suburban fringe and rural areas more economically than it could with the AWS (1700/2100MHz) and PCS (1900MHz) spectrum it already holds. "It's not cost effective to build out in these vast geographies with high-band or medium-band," Ray said.
The spectrum covers 70% of T-Mobile's existing customer base and 158 million PoPs. This includes nine out of the top 10 markets and 21 of the top 30 markets, he said.
Just as he told Light Reading in January, Ray has initial markets in mind where the 700MHz service will start towards the end of the year. These include Philadelphia, Dallas, Houston, Miami, and Minneapolis. (See T-Mobile CTO: On the Road to Low-Band.)
The CTO will also try and work around potential interference problems with Channel 51 TV broadcasters in affected areas, such as New York. For instance, Ray said, he can still deploy a network in parts of Long Island even if New York City is out for now and boost that prized "suburban fringe" coverage. (See T-Mobile: Channel-51 Interference a Non-Issue.)
The operator is also hoping to buy more A-Band and get potentially get more low-band 600MHz spectrum in the planned mid-2015 incentive auction from the Federal Communications Commission (FCC) .
T-Mobile made it clear that it considers the auction a milestone for the wireless industry. "There needs to be adequate regulatory protections to ensure the duopolists do not come out with all the spectrum again," T-Mobile CFO Braxton Carter told the conference crowd.
And just like the banana distribution industry, the CFO believes that three major competitors -- not four -- is the magic number for major mobile operators in the US. "It's not a question of if, it's a question of when," Braxton said when asked about the prospects for consolidation in the industry.
"To take a third-scale national player that has the scale benefits with the right business model could be very competitively enhancing," the CFO suggested. There has been talk of a T-Mobile-Sprint tie-up but the FCC appears to be downbeat about that combination. (See Tough Road Ahead for Sprint/T-Mobile?)
— Dan Jones, Mobile Editor, Light Reading
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