How Smaller Carriers Can Compete in a 4G World

6:10 PM -- It's no fun being a smaller carrier competing against the big dogs of the U.S. cellular scene.

AT&T Inc. (NYSE: T) and Verizon Wireless get the absolute pick of the best new wireless devices. The top two also have the deep pockets to load up on wireless spectrum -- as long as the government lets them -- and a marketing budget that dwarfs the smaller operators.

So, how do you compete against that?

Well, it seems to me that MetroPCS Inc. (NYSE: PCS) is definitely fighting to find its biggest niche against much larger 4G rivals. The company is, of course, known for contract-free phones and cheap unlimited data plans.

MetroPCS will start running a deal for a $149 Long Term Evolution (LTE) phone and a $55 unlimited data plan on Thursday. Its latest devices also look a lot better than the original offerings it launched the 4G network with.

That's not all though: MetroPCS has just launched the first voice-over-LTE phone in the U.S. in Dallas recently and plans to extend the service.

It is also launching its first Rich Communication Services (RCS) apps in the fall. This could be particularly important for the operator's younger audience, since RCS paves the way for users to make voice calls, video calls and instant messages to any user on any device with just a couple of touches on the device.

RCS could be seen as a way for MetroPCS and others to shut down over-the-top messaging apps since they rely on people being connected via the same app. Ed Chao, senior vice president of engineering and network operations at MetroPCS, tells me, however, that the operators will "expose" the RCS programming interfaces to third-party players to build apps on top of.

It's an interesting approach and -- while MetroPCS may desperately need more spectrum, more users and more revenue -- they don't seem short on ideas of how to move ahead.

— Dan Jones, Site Editor, Light Reading Mobile

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