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Summary:

T-Mobile US, the fourth largest wireless carrier in the U.S., spoke for the first time today about its plans for the spectrum it accrued in the AWS auction and detailed the rollout of its 3G network. Deutsche Telekom, T Mobile US’s German parent, said it would […]

T-Mobile US, the fourth largest wireless carrier in the U.S., spoke for the first time today about its plans for the spectrum it accrued in the AWS auction and detailed the rollout of its 3G network. Deutsche Telekom, T Mobile US’s German parent, said it would spend a total of $2.64 billion on a 3G network in the U.S. that it would start to deploy in the fourth quarter of this year. The company said most of the work on the 3G network would be completed in 2007 and 2008.

The $2.6 billion is in addition to the $4.2 billion the company has already spent as the top bidder in the AWS wireless spectrum auction, in which T-Mobile US won 120 licenses. The company needed the spectrum licenses to build an effective 3G network. T-Mobile US said the auction “doubled its spectrum nationally,” and that it had bought spectrum at a price 39% less expensive than historical spectrum prices.

T-Mobile US is trying to close the gap between its bigger three rivals, and is the last major carrier in the U.S. to build a 3G network. The company will be rolling out a UMTS network, but T Mobile US CEO Robert Dotson said that the network would be “HSDPA-ready.” Cingular already has HSDPA networks available in certain markets. It was really hard to find the specifics of the 3G technology in any of the releases, probably because UMTS isn’t as fast as HSDPA, and the company didn’t want to highlight that.

Deutsche Telekom said that T Mobile US contributed $8.44 billion — around 22 percent of the Group’s revenue and 43 percent of the revenue of the mobile communications segment — in the first half of 2006. That’s compared with 16% and 35% percent respectively in 2004. The growth has driven Deutsche Telekom to try to turn T Mobile into the largest subsidiary of the company.

As Deutsche Telekom invests $6.8 billion investment on spectrum and a 3G network for T Mobile US, the company said that there would be no change in the profit and revenue guidance for 2006 and 2007. At the same time T Mobile US briefly mentioned its fixed mobile trials using Unlicensed Mobile Access trials (UMA) in a few markets in the U.S., and said the company would expand to full-market trials later this year.

So T-Mobile US is ditching Catherine Zeta-Jones and spending a ton of money on a new network. Do you think it will work? Or is their 3G rollout too little too late?

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  1. Gerald Buckley Friday, October 6, 2006

    The best news in this whole article (besides the timeline) is C. Zeta Jones is out… She’s always given me the creeps.

  2. Because T-Mo is late to the 3G game, why don’t just skip 3G and start on a 4G network. That way they don’t spend nmoney playing catch up to continue to be 4th place in the US. Can the spectrum they just bought be used for 4G speeds? What are the technology hurdles for 4G? Will WiFi become more ubiquitous, lessening the need for high speed cellular networks? All I know is that I want T-Mo to offer the Nokia E70 with the UMA feature enabled.

  3. Uh, T-Mo is late because of the lack of spectrum. AWS auction fixed it and they’re building out the national network based on 3G stuff. 4G has yet to be defined really. Though Sprint’s WiMAX is labeled 4G, it’s not really.

    No one makes 4G gear yet. They are planning for big time download speeds. Should be HSUPA out of the gun instead of HSDPA ideally.

    I think Sprint is spending $2.1B for their WiMAX network and they don’t have a national footprint. $2.6+B gives you a 3G national footprint by the end of 08. Not bad – pretty aggressive for T-Mo. Let’s hope they execute cleanly.

  4. Late or not, the Sidekick + 3G + wifi = a vicious combination. If the new Sidekick 3 was using 3G technology, their sales would have been much, much higher.

  5. T-Mobile’s HSDPA launch in the Netherlands was not as successful as they had hoped. Initially, the goal was to lure away (voice) customers from other mobile carriers (and of course to keep existing T-Mobile voice subscribers from migrating to competitors). After a few months, T-Mobile gave up and said anyone, including those who are not T-Mobile voice subscribers, could get HSDPA service. Another change: initially they were going to bill people by the number of megabytes they send and receive, but they also gave up on that. Now they have different tiers of service — flat fee depending on the speed of the connection. The cheapest 9.50 EUR per month is “dial-up” (64Kbps down – 16 Kbps up) and the most expensive 1.8 Mbps down – 384 Kbps up) is 69.50 EUR.

  6. does 3G mean that we won’t see the “signal faded” message or calls dropping anymore? and when I press talk button, will the receiving phone ring immediately? because these 2 features are what i am waiting on..

  7. I don’t think they are too late. I think they are for the average reader of this site, but I firmly believe in supply and demand. If the US citizens wanted 3G, we would have had it by now. Most people I come across though are still figuring out text messages. Thats only been around since when ’95?

    What I do love is that, none of the carriers have learned, and we are still getting a slew of different technologies. EV-DO, WiMax, HDSPA, not mention existing EDGE, GPRS. This should make it easier to sell to users. sarcasm

  8. Leapfrogging to 4G sounds good on paper – the key is availability of handsets. When will we have comparable number and choice of 4G handsets similar to 3G handsets? It is still years away. 4G is only for data only, which is why I don’t see a lot of pickup until 4G handsets become available to support voice.

    The question here is what is T-mobile going to do about indoor coverage?

  9. The post by Ashutosh is very accurate and it made me laugh. It took forever for people to start using SMS in the US.

    T-Mobile is smart for deploying the UMA solution first.Every carrier of them has issues supplying coverage in buildings. High Floors, Basements, and IT Server Rooms can be challenging to try to cover. UMA should make it easier to fix coverage issues. This will help them grow their coporate customer base. Another thing I am curious to learn is if T-Mobile will allow users to use UMA outside the US. This could help eliminate international roaming charges. I will be surprised if other carriers do not jump on this band wagon.

    Another point is that when traditional networks get congested UMA would be nice to have. Yeah 3g and 4g are nice but WiFi is ready- now!

  10. The better question to emerge from this article is: Who are the vendors who will benefit from the rollout of UMA and Fixed Mobile Convergence (FMC). Obviuosly new gear, routers and gateways etc, are needed for this. Any ideas?

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