Could AT&T/T-Mobile Deal Mean an HSPA+ iPhone?

Analysts expect that Apple Inc. (Nasdaq: AAPL) could update the iPhone to support faster 3G in 2011 with Long Term Evolution (LTE) likely not happening until late in the year or 2012.

How Apple updates the next version of the iPhone will be particularly important for AT&T Inc. (NYSE: T) as it hopes to win regulatory approval for its planned $39 billion acquisition of T-Mobile US Inc. . (See AT&T to Buy T-Mobile USA for $39B and What Happens to Sprint After AT&T/T-Mobile Merger?)

Currently, the iPhone 4 runs on AT&T's High-Speed Packet Access (HSPA) 3G network and Verizon Wireless 's CDMA EV-DO 3G network. An upgrade to support HSPA+ could be in the works for iPhone 5, according to UBM TechInsights . (See Verizon Finally Gets the iPhone 4 and AT&T Drunk on iPhone Success.)

Chad Davis and Steve Bitton, product managers at our sister company United Business Media Ltd. (UBM) (London: UBM.L), write in a note to LR Mobile Friday:

    At this stage, the signs do point to the next generation being more HSPA+ ready than prepped for LTE. HSPA+ will provide an improvement over 3G but will still not be as fast as LTE (4G) such as the service provided by Verizon. HSPA+ will be the “4G” promoted by AT&T and T-Mobile. It’s not true 4G but still improves above today’s rates of 7.2Mbps download and 5.76Mbps upload HSPA speeds of the iPhone 4 to what HSPA+ networks can offer.

At this stage, both AT&T and T-Mobile are updating their 3G GSM networks to support 21Mbit/s HSPA+. T-Mobile has also been working on updating its network further to move to the 42Mbit/s variant of HSPA+. (See T-Mobile USA Promises 42-Mbit/s 3G in 2011 .)

It could be relatively easy for Apple to update the next version of the iPhone so that it could run on both carrier's networks. T-Mobile currently uses paired 1700MHz/2100MHz AWS spectrum for 3G while AT&T supports 850MHz and 1900MHz frequencies. The latest iPhones have 2100MHz support for European 3G services. Any iPhone that would run across T-Mobile's 3G would need more radio support to operate over the paired 1700Mz/21OOMHz bands as would any of AT&T's other 3G phones.

UBM's Davis and Bitton, however, expect that even faster LTE 4G support could lag the next major iPhone update:

    The main hold-up, in our opinion, is that network expansion to LTE seems to be happening at not the quickest rate. ... We expect both LTE iPhone & iPad to occur within the same calendar year -- which could be anywhere in late 2011 to 2012.

Berge Ayvazian, senior consultant at Heavy Reading , suggests that AT&T will have its first LTE markets running in "late August or September." Thus, he suggests, there is little motivation for Apple to prep LTE devices before that, instead waiting to provide dual-mode devices for AT&T and Verizon at the same time. Indeed, the vendor tends to prefer to launch onto a more mature network than any LTE network is likely to be in 2011.

— Dan Jones, Site Editor, Light Reading Mobile

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