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T-Mobile Up and Down With 3G

T-Mobile hopes the proposed rollout of a nationwide 3G network will make up ground lost over the past two years. The announcement comes after the company's successful bid for more spectrum at a recent FCC auction.

Before the auction, T-Mobile only had an average spectrum depth of 25.9 MHz among its top 100 markets, just two-thirds of that possessed by Verizon Wireless and less than half of leader Cingular. Its auction success bumped T-Mobile to a more respectable average of 52.2 MHz, just behind Verizon Wireless.

Although late to the 3G game, T-Mobile has two advantages: mature and more affordable second-generation technology and cheap spectrum. Spectrum prices are usually compared using dollars per MHz POP. In the recent auction, T-Mobile acquired spectrum at $0.63 per MHz POP, compared with previous auctions that exceeded $1. However, if T-Mobile was behind with this month's announcement, it will be even further behind as it builds out the network, slated for completion in 2008. This leaves plenty of time for Cingular and Verizon to bulk up their networks.

T-Mobile would like to spin 3G as a planned success. But only a few months ago there was speculation that parent company Deutsche Telekom would divest itself of its subsidiary. Through the good fortune of affordable spectrum and amenable hardware vendors, however, T-Mobile may yet have a 3G play. --Frank Bulk, [email protected]