I don't normally cover the cellular space, deferring to co-columnist and 3G expert Peter Rysavy, but it's impossible for me to pass by this past week's biggest wireless news story: T-Mobile USA's joint announcement with German parent company Deutsche Telekom to roll out nationwide 3G.
The news was hardly unprecedented in light of T-Mobile's recent success at FCC Auction 66 for spectrum more affectionately called AWS (Advanced Wireless Services). High-speed cellular data services, typically labeled '3G,' require a lot of spectrum. EV-DO, a CDMA-based technology, uses a pair of 1.25 MHz channels. T-Mobile likely will use HSDPA (High-Speed Downlink Pack Access); this GSM-based technology uses a pair of 5 MHz channels.
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 (which recently purchased AT&T Wireless). Post-auction this bumped up to a more respectable third-place finish, with an average of 52.2 MHz, just behind Verizon Wireless. T-Mobile's conference call and associated press collateral alluded more than once to the fact that its current spectrum constraints have now been resolved in "New York, Los Angeles, Boston and Miami."
Until two years ago, T-Mobile's cellular data network offered respectable speeds. While GSM providers were trudging along with GPRS rates of 30 kbps and CDMA providers with CDMA-1xRTT rates of 60 to 70 kbps, T-Mobile's EDGE network dominated with speeds of 100 to 130 kbps. That lead has long been overtaken. Cingular is at least a year into its own substantial HSDPA (based on the UMTS framework) deployment, which offers downstream speeds of 400 to 700 kbps. And Verizon has had its EVDO-Rev 0 technology for even longer; it offers 400 to 600 kbps.
In its semi-defensive position, T-Mobile has pointed to the roughly 8,000 Wi-Fi hotspots it provides as well as its cellular data service, which costs only $30 a month--less than half of its competitors' initial price points. Nevertheless, in the months leading up to the AWS auction T-Mobile dropped several hints that it was going to participate. When the auction finished, T-Mobile had bid $4.2 billion to claim 120 licenses that provide at least 10 MHz of spectrum in the continental United States and contribute to a national average of 23.2 MHz.