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T-Mobile pounds the first nail in 2G’s coffin

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T-Mobile CTO Neville Ray

T-Mobile isn’t just launching a sizable LTE network in 2013, it’s becoming the Grim Reaper for 2G technology as we know it. In an analyst conference call on Thursday, T-Mobile unveiled a plan to radically reshape its networks, shutting down the majority of its 2G GSM capacity so it can focus almost entirely on 4G. As a result T-Mobile will get a bigger, badder mobile broadband network and, to boot, will almost certainly land the iPhone(s aapl).

With this new network configuration, T-Mobile is pulling a technological coup. Though it is spectrum-poorest operator of the Big 4, it will wind up with a higher-capacity LTE network than Sprint(s S) and one with comparable capacity to AT&T(s T), while still being able to milk a massive HSPA+ network for years to come. In the process, T-Mobile is calling into question the so-called spectrum crisis. While other operators are desperately searching for new airwaves, T-Mobile found its future growth spectrum sitting right under its nose. Consumer groups and regulators are almost certainly going to ask why AT&T(s t) and Verizon Wireless(s vz)(s vod) don’t do the same.

The network numbers T-Mobile CTO Neville Ray revealed at the call were surprising: 90 percent of the carrier’s data traffic and 50 percent of its voice traffic are running over T-Mobile’s HSPA+ networks. That means its GSM networks are languishing even though they occupy half of T-Mobile’s average 54 MHz of spectrum per market. T-Mobile’s answer is to shut them down, clearing the way for LTE and more HSPA+.

T-Mobile plans to sunset between two-thirds and three-quarters of its GSM channels in the PCS bands leaving, only a modicum of 2G bandwidth left for older phones that don’t sport 3G or 4G radios and to support basic data services for its machine-to-machine communications business. All of that capacity would then be turned over to HSPA+, creating a mobile broadband network on PCS almost as large as the one it currently runs on its advanced wireless service (AWS) frequencies. Moving HSPA+ to PCS opens up many doors for T-Mobile, most notably the ability to support any iPhone Apple makes for the U.S. market.

But T-Mobile won’t shut down HSPA+ at AWS completely. It will turn off some of that capacity and combine the remnant airwaves with the AWS licenses it took from AT&T as a consolation prize for their merger’s failure. It would then use that capacity to build a 10MHz-by-10MHz LTE network over 50 percent of its mobile broadband footprint. That would give it the same capacity as Verizon’s LTE network today and double that of the LTE network Sprint plans to launch this summer. In the remaining half of its network T-Mobile can only support a 5MHz-by-5MHz carrier, which would make its capacity configuration similar to AT&T’s. But keep in mind, T-Mobile has a fraction of the customers of Ma Bell and Verizon – it can make 5×5 go a long way.

Ray and CEO Phillip Humm said T-Mobile USA is still on the hunt for more spectrum, and ideally it would like to lock down more AWS airwaves to create a massive 20MHz-by-20MHz LTE network. That seems unlikely considering that its competitors are quickly scooping up what unused airwaves remain in the market, but T-Mobile is also challenging those deals.

Though Humm and Ray didn’t discuss it in the call, there’s always the possibility of repeating its network cannibalization feat at a later date to capture even more mobile broadband capacity. As more voice traffic moves to HSPA+, and more data traffic moves to LTE, T-Mobile could shut down its GSM network almost entirely and continue the HSPA’s shift down to PCS, which would in turn clear more AWS airwaves for LTE.

7 Responses to “T-Mobile pounds the first nail in 2G’s coffin”

  1. Does that mean the option to “use 2G only” mode to save battery would no longer work? I’m a bit confused by this whole frequency talk. I don’t receive T-Mo’s HSPA service at all, only EDGE, so will the new changes make it possible to get HSPA on more frequencies? Somehow HSPA+ is only available when I’m outdoor.

    • Correct, once tmobile refarms the spectrum you will no longer be receiving their edge signal therefore the 2G option will not be of use to you as you wont be receiving the signal. What tmo is doing is very smart, they will use the spectrum they have to deliver fast speeds and more capacity for a low price. They can count me and my iPhone in, the only thing stopping me before was that i could only get edge speeds, but now that they are working on bringing 3g to iPhones im definitely making the switch with my unlocked iphone

  2. Niklas Munck

    Although T-Mobile will have the equivalent of Verizon and AT&T spectrum positions allocated to LTE in various markets, their throughput is going to be significantly higher than their competitors. This is not only because they have fewer customers but more importantly, much better spectrum. AT&T and Verizon are building LTE on their 700Mhz frequencies which are more or less useless for capacity. Great for coverage though. T-Mobile spectrum on 1700Mhz will be much better suited for LTE even if they use the comparable number of Mhz as their competitors. The reason for this is that the higher frequencies have worse propagation abilities, resulting in smaller cells. To cover the same area as Verizon and AT&T, T-Mobile will need about 2-4 times the number of towers. Yes, this is more expensive, but with smaller cells, there are fewer people who can geographically be located in each cell, no matter how many customers you have. 700Mhz great for coverage, not so much for capacity, 1700Mhz the other way around.

    • Kevin Fitchard

      Hi Niklas,

      I hear you, but I don’t buy the propagation argument. Operators deploy much cells much more densely in urban and high-traffic areas (where the capacity is needed), keeping cells much smaller than their propagation would permit. Admittedly 700 MHz is a huge benefit on a rural highway, but the majority of the LTE build is going to be in cities, which means density, which means advantage nullified.

  3. Craig Campbell

    I think this is a great move by T-Mobile in general, and for me personally it will be a godsend to have HSPA+ on the PCS 1900MHz band. I have an iPhone 4 lying unused, and recently purchased an unlocked international Galaxy Note – which I am unhappily forced to use on AT&T to get HSPA+ speeds on 1900.
    My prediction is that the HSPA+ move to 1900 will happen fairly quickly, over the next few months, to have as much of it completed as possible in time for the next iPhone launch in September/October timeframe. This way, Apple do not have to bother with an AWS-capable iPhone, and T-Mobile could potentially offer the same iPhone model as everyone else. Of course, this doesn’t take into account the different LTE bands – but that’s going to be a nightmare in itself. I don’t see how Apple could possibly offer one single model which would work in all the various LTE bands which will be in use all over the world!
    Of course, offering the iPhone but without an LTE network will still be a disadvantage to T-Mobile in 2012, but their HSPA+ network is actually fast enough for anything day-to-day in my opinion – they’ll just have to really push the marketing.

    The other thing I would expect is that the current AWS HSPA+ would stay active as long as possible running alongside the 1900 HSPA+, in order to support all those users who currently have AWS-only HSPA+ phones. Some of those users will still be within their 2 year contracts when their AWS HSPA+ disappears, so it would behoove T-Mobile to provide replacement phone options, or extremely aggressively priced early upgrades.

    In addition, I would expect all T-Mobile phones launched from now – or extremely shortly – to support BOTH AWS HSPA+ and 1900 HSPA+.

    We shall see, but in my opinion, this is awesome news!

    • Kevin Fitchard

      Hi Craig,

      I’m giddy myself. I love it when operators bite the bullet and make bold technology choices (the problem is always the follow through). As for the dual-band HSPA+, several of T-Mo’s phones already support it. They’ve obviously been preparing for this for a while.