When it comes to 4G, T-Mobile has the advantage

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Chris is the principal analyst for ACG Research's mobility service and is responsible for consulting engagements, client relations and providing thought leadership for the industry.

Chris Nicoll


Enough with the industry chatter about whether or not T-Mobile's HSPA+ network is 4G. Technically, it is not. Neither is Sprint's WiMAX network or Verizon's LTE network, according to the International Telecommunication Union. But does it really matter? The average consumer doesn't know what 4G means (49% according to Nielsen) and really doesn't care. Most are only concerned that 4G offers better quality than 3G. An alarmingly high percentage of iPhone 4 users think they are already using 4G (34% according to Retrevo, July 2011). Given these statistics, it is highly unlikely that users worry about the greater latency control and spectral efficiency of LTE compared to HSPA+. What consumers really worry about beyond cost is device selection and coverage, which impacts what really IS important: the user experience. And here T-Mobile is one of the leaders in the industry.

Two years ago Sprint started the 4G name game with its WiMAX network by talking about faster-than-3G speeds and a hot, new device, the HTC Evo 4G. The Evo 4G introduced the standard for the 4G smartphone, and Sprint actually set the stage for how the rest of the industry rolls out its 4G networks. Clearly, someone at Sprint figured out that fast is fine but fast with a cool device is even better. A dongle in a laptop is not very sexy, but streaming HD video on a great smartphone screen was, as they said in the ‘60s, "where it's at."  

The Evo 4G was a big success and T-Mobile was watching. T-Mobile's marketing wavered by marketing ‘4G-like' speeds before finally settling on calling its HSPA+ network 4G for its marketing efforts and similarly labeling its phones. Regardless of what it called the network, T-Mobile was bringing to market interesting and appealing devices including the HTC G2 and myTouch smartphones, and more recently the Samsung Galaxy S and Galaxy II S 4G smartphones. T-Mobile was highly regarded for the breadth of its device portfolio including low and high end devices.  Both Verizon and AT&T apparently took notice when they launched their own 4G porfolios. Both companies marketed the 4G aspect of their inexpensive and basic smartphones as well as their industry leading devices such as Verizon's Motorola Droid Razr and AT&T's Samsung Galaxy S II Skyrocket.

Table 1 shows how T-Mobile stacks up for 4G devices. The caveat here is that, yes, this combines +21 and +42 devices for T-Mobile and for AT&T. The point is that all of the mobile operators have quickly embraced a wide range of 4G devices as well as recognized that users employ multi-devices to satisfy their user experience requirements.

 

T-Mobile

AT&T

Sprint

Verizon Wireless

Smartphones

14

20

9

8

Tablets

1

3

1

2

USB Dongles

2

2

3

3

HotSpots

2

1

4

2

Table 1. 4G Devices from Leading US National Mobile Operators

Think devices don't matter? Against the backdrop of the impending AT&T acquisition, T-Mobile gained only 126,000 subs in Q3 or about a 1/10th of what Sprint added (1.26M). Yet, T-Mobile's aggressive device strategy was an argument used by competitors against the AT&T/T-Mobile merger.

Regardless of device, a serious issue is network coverage, and for users today, the 4G issue is about coverage AND speed. If they have coverage, they want speed, but speed without coverage is useless. Unfortunately, this is where T-Mobile has historically had a problem. The spectrum position in which it operates (1.7/2.1 GHz) does not have the same building penetration characteristics as Verizon's and AT&T's 700 MHz positions. It requires more cell sites as well as in-building strategies (such as T-Mobile's Wi-Fi calling capabilities) to provide a similar coverage and experience to Verizon's.

 

Markets

Pops (million)

T-Mobile HSPA+42

163

180

Sprint (WiMax)

71

120

Verizon Wireless (LTE)

179 + 111 major airports

186

Table 2. Market Information

Currently, T-Mobile's nationwide 4G network (HSPA+ 21) reaches 208 markets and more than 200 million people. T-Mobile's increased 4G coverage (HSPA+ 42) is available in 163 markets, reaching more than 180 million people across the country, according to T-Mobile. That compares to Verizon's 179 markets and 111 major airports, which currently covers more than 186 million people and will ultimately service 200 million by mid 2012. Sprint delivers to 71 markets and 120 million people.

Assuming you have coverage for your hot, new smartphone, what about performance? Download speeds in the single digits to low teens MB range were typical for early T-Mobile's and Sprint's 4G networks smartphone users. How quickly things change. Tests I and others performed have confirmed that the current level of 4G smartphone performance is now much higher. During random tests in October of this year I hit the mid 20Mbps range using T-Mobile's HSPA +42 network, recorded speeds between of 27Mbps and 36Mbps on my Verizon Samsung Charge LTE phone, and saw 12Mbps to 14Mbps on a Sprint HTC Evo4G. This shows that where there is coverage, users have competitive mobile broadband services from which to choose.

What is the next area for marketing differentiation? Operators should be looking at voice quality. There is a noticeable difference in voice quality among the Verizon Samsung Charge LTE, T-Mobile Samsung Galaxy S II and Sprint HTC Evo 4G phones, at least in the tests I ran. In side-by-side comparisons, T-Mobile and Sprint had the best voice quality with Verizon noticeably trailing. Is this an opportunity for HD VoLTE? Perhaps, but T-Mobile executives emphatically maintain that voice quality is a priority for the company and a requirement for which it optimizes. Time and competition will determine how important voice quality becomes as a market issue.

T-Mobile continues to push the definition of 4G but clearly it is raising the bar from performance, device and cost perspectives and is pushing hard on coverage. If T-Mobile's HSPA+42 network is not true 4G, then where does Sprint's 4G network fall? Or MetroPCS 4GLTE network which is not close to any of the national networks from a speed perspective? Maybe it is time to finally move beyond the esoteric technical arguments of what is and is not 4G, and instead, use those arguments to define differentiation in terms of real user experience. T-Mobile is already there.

Chris Nicoll has more than 20 years of expertise as a leader in defining telecom strategy. Chris is the principal analyst for ACG Research's mobility service and is responsible for consulting engagements, client relations and providing thought leadership for the industry. Prior to joining ACG Chris was principal analyst at Nicoll Consulting, where he developed marketing strategy and positioning for leading telecom operators.   For more information about ACG's mobility service contact Chris at cnicoll@acgresearch.net.