T-Mobile said today it plans to invest $4 billion “over time” in network modernization with the goal of offering LTE service in 2013. The move came one day after the company announced disappointing results for the fourth quarter of 2011 and two months after AT&T officially gave up plans to purchase the company.
T-Mobile’s fourth quarter revenue was $4.57 billion, down from $4.69 billion for the previous quarter, and net customer losses were 526,000 which the company attributed to the lack of the iPhone. But in yesterday’s earnings release, T-Mobile USA CEO and President Phillipp Humm vowed to get the business back to growth “in 2012 and 2013.”
It’s not surprising to see T-Mobile ratcheting up network investment plans. As so often seems to happen in situations such as this, the company likely de-emphasized network investment during the many months that the merger was pending.
The move to LTE in 2013 will make the company a latecomer in many markets. But the company vowed to continue its strategy of differentiating its offering based on price—a strategy it referred to as that of a “reinvigorated challenger.”
“We want to be known for delivering the best value in wireless because of the advanced technology we deliver at an affordable price,” said Humm in today’s announcement. “Over the next two years we’re prioritizing and investing in initiatives designed to get T-Mobile back to growth in the years ahead—beginning with the transformation of our network.”
Of the planned $4 billion investment, approximately $1.4 billion is incremental, T-Mobile said. The company ultimately plans to offer LTE in the “vast majority of the top 50 markets and 20 MHz service in 75% of the top 25 markets.”
The company also said it would “aggressively pursue” the B2B segment; expand its sales force by 1,000; ramp up advertising spending and attract new mobile virtual network operator partners. In addition the company said it will continue to remodel its retail stores and expand distribution.
New spectrum drives LTE plans
For T-Mobile, the silver lining in the failed AT&T merger cloud is additional spectrum that it is expected to receive as a result of the termination of the transaction. That spectrum will enable T-Mobile to refarm its spectrum holdings to support LTE, the company said.
While planning its LTE launch, T-Mobile continues to use the term “4G” for its HSPA+ service, which offers download speeds comparable to today’s LTE networks but which many technologists would consider to be a 3G technology. The company began using the term “4G” for HSPA+ in late 2010, beefing up its backhaul infrastructure to achieve comparatively high HSPA+ data rates—a move that drove considerable industry debate at the time.
“Today we operate America’s largest 4G network delivering a fast and reliable 4G data experience with HSPA+,” said Neville Ray, T-Mobile’s chief technology officer, in today’s release.
He noted, however that launching LTE would enable the company to “take advantage of technology infrastructure advancements and benefit from a more mature LTE device ecosystem.”
Other details of T-Mobile’s network investment plans announced today:
- Installing new equipment at 37,000 cellsites
- Being the first carrier to deploy new antenna integrated radios on “many” of its cell towers to enhance performance
- Reducing the amount of 1900 MHz spectrum being used for GSM, deploying HSPA+ in the PCS band and making room in the AWS band for LTE—moves the company said it is able to make as a result of growing smartphone usage and declining 2G usage
- Harmonizing T-Mobile’s spectrum band with the U.S. market and international carriers