AWS-3: The destination of T-Mobile's LTE network?
T-Mobile USA recently completed an eight-city spectrum-interference study (click here to check it out) with the goal of convincing the federal government to relinquish a massive chunk of bandwidth that--if all goes to plan--T-Mobile might use to build an LTE network. And though T-Mobile still faces a range of challenges in its bid for the spectrum (and may not even use it for LTE) the situation does give the carrier yet another option in its efforts to maintain equal footing with rivals in the mobile broadband game.
T-Mobile's spectrum-interference study centered on the 1755 - 1780 MHz band. That's the block of spectrum T-Mobile is urging the FCC to pair with the AWS-3 block (2155-2580 MHz) and put up for auction. If the FCC does pair AWS-3 with suitable spectrum, and if it does put those airwaves up for auction, and if T-Mobile wins that auction, officials for the nation's No. 4 carrier acknowledge that T-Mobile could use that bandwidth to launch a nationwide LTE network.
Obviously, that's a lot of "ifs." Nonetheless, the issue represents another factor in T-Mobile's growing arsenal of 4G options. Already, the carrier is rumored to be in talks with both Clearwire and Harbinger Capital Partners (now LightSquared) for potential spectrum tie-ups. However, both those approaches require Deutsche Telekom's U.S. subsidiary to work with another entity to build a next-generation wireless network. The AWS-3 option could give T-Mobile direct control over its next-generation network future.
To be clear, there are a range of factors in play and a variety of possible outcomes. AWS-3 is currently "unpaired," which means it isn't matched to an adjacent spectrum band--U.S. wireless carriers generally prefer paired spectrum bands that allow for Frequency Division Duplex technology (rather than the Time Division Duplex technology used for unpaired spectrum). Startup M2Z, which is headed by heavyweights John Doerr and John Muleta, has for years petitioned the FCC to give the company the unpaired AWS-3 block of spectrum; M2Z wants to use it to build a nationwide wireless broadband network that would provide a free tier of service.
Meanwhile, T-Mobile--backed by the CTIA and others--is urging the FCC to pair AWS-3 with harmonious spectrum: And that's where T-Mobile's eight-city study comes into play. T-Mobile is arguing that the 1755 - 1780 MHz band would make an appropriate match for the AWS-3 block (2155-2580 MHz). However, the feds are currently using the 1755 - 1780 MHz band. T-Mobile conducted the survey, which spanned markets across the country, to determine just how much federal traffic is running over that band. The result?
"There's quite a bit of open spectrum," said Kathleen O'Brien Ham, vice president of federal regulatory affairs at T-Mobile USA (and who just so happens to be one of FierceWireless' 2010 Women in Wireless).
Ham said clearing the 1755 - 1780 MHz band of federal users would be a relatively straightforward process, and one with precedent: T-Mobile and the wireless industry worked to clear AWS airwaves following the auction of that spectrum in 2006. (Perhaps not surprisingly, T-Mobile was big winner in the AWS auction, and is currently using the spectrum for its 3G network--it has so far managed to cover more than 200 million people with its AWS winnings).
An FCC spokesperson did not immediately respond to questions regarding the agency's plans for the AWS-3 block. According to filings by the CTIA, the National Broadband Plan recommends the NTIA investigate pairing AWS-3 and provide results by Oct. 1; the FCC is expected to make a decision following the conclusion of NTIA's investigation.
It's no secret that the FCC under Chairman Julius Genachowski has made freeing spectrum for mobile broadband a key goal. That makes a bet on AWS-3 getting paired and auctioned at least sensible, but T-Mobile's hedging (Clearwire, Harbinger and AWS-3) is probably a wise move.
To be clear, even if everything goes as T-Mobile hopes, AWS-3 likely won't be ready for mobile broadband action for a while. But, as Ham pointed out to me, T-Mobile was late to the 3G game--it deployed its 3G network after AT&T Mobility(NYSE:T), Verizon Wireless (NYSE:VZ) and Sprint Nextel (NYSE:S)--and hasn't suffered terribly as a result. In fact, Ham argued that, due to the delay, the carrier deployed 3G with the latest iteration of the network technology, thereby allowing it to quickly upgrade to the faster speeds provided by HSPA+. Since an AWS-3 auction probably won't happen quickly, T-Mobile may well be able to cash in on the economies of scale and vendor innovations driven by early LTE rollouts by Verizon (in 2010) and AT&T in (2011).
A final, important addendum: T-Mobile's Ham noted that the carrier has not decided what to do with AWS-3 spectrum if it is paired and if the carrier does get it. She said T-Mobile could use AWS-3 for either LTE or as a booster to its existing 3G network. --Mike