More than a year after Verizon broke AT&T’s monopoly on the 3G iPhone, the product is finally becoming available to smaller wireless network operators. C Spire became the first smaller carrier to get the product back in October. And today two additional small carriers—nTelos Wireless and Alaska Communications—announced that they would begin offering the iPhone 4S beginning April 20.
One reason the smaller carriers didn’t get the product sooner is technical. Like Verizon, all three of the smaller carriers operate CDMA networks, making them incompatible with the GSM iPhone that Apple initially built for AT&T. But a CDMA version of the product has been available since January 2011—and one can’t help wondering if the nTelos and Alaska Communications announcements were intentionally timed to come out one month after Apple’s announcement about 4G LTE versions of its popular iPad offering.
Perhaps Apple deliberately waited to give the iPhone 4S to the smaller carriers until after the LTE iPad was released as a concession to the large Tier 1 carriers that account for the vast majority of Apple’s mobile device revenues. If that’s true, the next question is how soon the smaller carriers might get LTE offerings from Apple. Will Apple wait until the launch of the next generation of LTE devices before releasing the LTE iPad to the smaller carriers?
The answer here is likely to depend on a combination of technology and regulatory policy. As we have previously reported, the 700 MHz spectrum band where many planned LTE deployments are likely to be made has been broken into multiple smaller bands. As of now device manufacturers including Apple have focused on building devices only for two of those smaller bands— the one in which AT&T holds most of the spectrum and the one in which Verizon owns most of the spectrum. Unlike with the 3G iPhone, smaller companies may not be able to ride the larger carriers’ coattails to obtain 4G Apple products for their networks but instead may have to persuade Apple to build a version just for them.
Apple previously has demonstrated a reluctance to build new versions of its mobile products without substantial volume commitments. Sprint, for example, had to commit to spending $20 billion for 30 million iPhones before it could get Apple’s attention.
All this could change, however, if the FCC takes action requiring devices in AT&T’s 700 MHz spectrum band to interoperate with devices in the band that is held largely by small wireless carriers. That’s a step the commission is considering and which is currently going through a comments process. The proposed rulemaking says nothing about interoperability with Verizon’s spectrum band and so far Verizon and AT&T each have their own 4G LTE iPad that doesn’t work on the other company’s network. But the FCC previously adopted data roaming requirements so it would seem that eventually we will see interoperability between products operating in Verizon’s band and products operating in AT&T’s band, which in turn may be required to interoperate with the smaller carriers’ band.
These requirements would apply to all mobile device manufacturers. But they would be particularly critical for Apple, which dominates the tablet market and has a strong share of the smartphone market.
