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?