Wireless operators set to blanket U.S. with LTE - Aided by foreign investment

It has been just two years since Verizon , the largest wireless network operator in the U.S., launched the nation’s first in 38 cities in December 2010. At the time, second place AT&T was focused on upgrading their 3G network to HSPA+, with CEO Ralph de la Vega saying that there was no reason to move to until handsets were available; AT&T would later re-brand their HSPA+ as “,” kicking off ad wars that continue to confuse consumers. Meanwhile, Sprint-Nextel had actually been first out of the gate with a 4G offering built on , and was continuing on a plan to deploy Clearwire’s 2.5 MHz spectrum assets across the country. Trailing far behind in fourth place, T-Mobile was also claiming the 4G label for their HSPA+ network.

As we approach the end of 2012 and look forward to 2013, we see a dramatically different picture developing. By the end of next year, many Americans will be able to choose a 4G LTE service from each of the top four wireless operators. Verizon, still claiming a wide lead with 250 million potential subscribers (POPs) covered by LTE in 400-plus markets, expects to have all of their existing 3G customers covered by mid-year.

AT&T finally pushed into LTE with an initial launch in five cities in September 2011, even though contrary to earlier statements they would not have an LTE smartphone available for two more months. In August 2011, the U.S. Department of Justice rejected AT&T’s bid to expand their footprint by acquiring T-Mobile from Deutsche Telekom on the grounds that it would lessen competition. Now, at the end of Q3 2012, AT&T claims their LTE deployment is ahead of schedule, covering “more than 135 million POPs.” On November 7, the carrier announced Project Velocity IP (VIP), with a plan to cover 300 million POPs with LTE by the end of 2014.

Sprint’s path to 4G has been especially chaotic, first distancing themselves from spectrum-rich Clearwire with a new aggressive LTE “Network Vision” one year ago, then reversing themselves by acquiring more shares in the company and reassuming majority ownership in October. The latest Clearwire move was prompted by Sprint’s announcement that Japanese wireless operator SoftBank would acquire a 70 percent share of the company, injecting $8 billion in a total $20 billion deal. Sprint already claims to have FD-LTE in 32 markets, targeting near-complete coverage of all their markets by the end of 2013.

T-Mobile and its German parent, Deutsche Telekom, came out of their failed merger with AT&T the beneficiaries of a $3 billion
breakup fee and some of AT&T’s wireless spectrum in 128 markets. On October 3, Deutsche Telekom announced a $1.5 billion plan to acquire MetroPCS, and combine the fifth largest carrier with T-Mobile USA. MetroPCS currently offers LTE service in 14 U.S. cities, on spectrum that is complementary to T-Mobile’s. At the OpenMobile Summit in San Francisco on November 7, T-Mobile USA CMO Andrew Sherrard said that by combining the spectrum assets of the two companies, T-Mobile will be able to offer paired 20 MHz download and upload channels, which could offer much higher data rates than competitors who are using 10 MHz and 5 MHz bandwidth. Sherrard concluded the company would cover 200 million POPs with LTE by the end of next year.

What of the “spectrum crisis”?

The furious pace of LTE rollout in the U.S. begs the question, “Do we still have a ‘spectrum crisis’?” The FCC thinks so, and will be pushing forward on a plan to open up a total of 500 MHz of additional bandwidth. Deploying small cells in Heterogeneous Networks (HetNets) provides an alternative, as operators can reuse spectrum for broader coverage and higher capacity. AT&T says they will deploy more than 40,000 small cells as part of their VIP strategy. At OpenMobile, Mark Gorenberg of the President’s Council of Advisors on Science and Technology (PCAST), the Technology Advisory Committee of the FCC, outlined a concept for dynamically sharing spectrum in the 3550 MHz band. In his plan, small cells could use a geo-location database to create “spectrum superhighways” that could open up an additional 100 MHz of spectrum. A combination of techniques is likely to be employed, but the bottom line is that the U.S. will be a 4G nation in the next two to three years. Then the operators can start working on !