Updated: MetroPCS (s pcs) launched the nation’s first Long Term Evolution network today in Las Vegas, as well as the first handset to run on it: the Samsung Craft. The good news is that the network will be fast, and the plans to get on that network will be cheap: $55 for talk, text, data and navigation and $60 per month if people want the 18 additional video channels. However, it won’t be available on an actual smartphone out of the gate. The Samsung Craft doesn’t run a separate operating system such as Android (s goog), but it does have a web browser, a QWERTY-keyboard and a touchscreen.
For those feeling underwhelmed, perhaps this isn’t the LTE story you were looking for. What it is: a prepaid mobile operator that’s trying to retain customers in a world gone gaga for mobile Internet. MetroPCS customers aren’t really looking for the next hot Android or iPhone (s aapl). They’re looking for access to Facebook, Twitter and most importantly, online video, without having to sign a contract with a carrier. According to Tom Keys, COO of MetroPCS, about half of them use their phone as their primary Internet connection, and about 90 percent of them use data on their handsets. “We built this for our customer base, not as a 4G iPhone replacement,” Keys said.
So this isn’t for the MiFi crowd as much as it’s for the MySpace crowd (a site that came up often in Keys’ examples of what his customers want on a phone). That crowd wanted video, and for MetroPCS, LTE was the only option that would work to deliver video for a cost-sensitive customer base that could leave at any time. So for those of us eagerly tracking the spread of faster mobile networks, MetroPCS’ move and how it’s going about rolling out the network — from the pricing plans to the fact that it isn’t capping data plans for now — illustrates how mainstream mobile broadband has become. We’ve gone from investment bankers toting BlackBerry devices to teen tweeters in less than a decade.
Unlike the larger, postpaid carriers, MetroPCS isn’t announcing big LTE plans; for now it won’t say where it will next roll out LTE, nor when. Update: Keys says the goal is to get the LTE network rolled out to each market where the operator currently has coverage by the end of this year, and to have 1:1 coverage where it has CDMA service before the end of 2011, which is not
a far cry too far off from Verizon’s (s vz) plans to roll out LTE in 25-30 cities before the end of this year and cover up to 100 million people. MetroPCS has a smaller footprint of about 19 markets which cover about 25 cities or 110 million people. Whereas AT&T recently said it will spend about $700 million rolling out the initial stages of its LTE network this year, Keys estimates his company will spend between $500 million and $700 million on its rollout. It will share backhaul and antennas already in place for its 3G network.
Keys said that for now, voice on the handset will still be delivered using the 3G network, which means when a voice call comes in, the data network will stop as the phone switches over. This isn’t ideal, but other 4G voice standards aren’t actually in place yet. This is just one area where being early means MetroPCS differs from the Platonic ideal of an LTE network with all-IP calls and fast speeds on high-end handsets. However, as other networks roll out their LTE infrastructure, Keys sees smartphones and even tablets coming to MetroPCS, saying that the next likely handset will have Android. He wasn’t willing to wait, because his customers weren’t willing to wait for a better mobile broadband experience, and his customers vote with their feet every month.
So for those in MetroPCS markets who also aren’t willing to wait, the Craft will cost about $300 (after a $50 rebate) plus the $55 or $60 per month for the access. Keys said that for now, he couldn’t discuss roaming for 4G, but MetroPCS does have roaming agreements for voice with other carriers. I’m hoping he’s able to share more information when I get him onstage next week at our Mobilize conference Thursday in San Francisco. For now, there are no plans to offer 4G data cards or dongles, and you can’t use the Craft as a wireless hot spot, but keep watching MetroPCS, because in the cutthroat pre-paid world, its LTE launch and attention to social and video features on phones is a solid example of how competition between providers and a lack of two-year contracts can change the market dynamics.
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