T-Mobile's 'rock star' CTO faces huge challenge with MetroPCS buy
Until Oct. 3, T-Mobile USA's Neville Ray was merely a chief technology officer. Now he is a "rock star" charged with engineering one of the largest U.S. mobile network mergers in history. T-Mobile USA and MetroPCS (NYSE:PCS) expect to close their planned merger sometime in the first half of next year, combining T-Mobile's 33.2 million customers with MetroPCS' 9.3 million customers. Integrating two networks of such size is sure to be a Herculean challenge, but T-Mobile CEO John Legere has just the man for the task. Ray, who was named CTO in November 2010, has been overseeing a dramatic and stunningly rapid modernization of T-Mobile's entire network operation over the past seven months as the operator prepares to roll out LTE in 2013.
"This is a rock star. This is a real network genius, and he's known in the industry, and what he's been doing in the refarming and setting up of LTE already is one of the things that's made this deal possible," said Legere in a conference call to discuss the merger.
It's hard to believe that just 10 months ago, T-Mobile was still in a position to be acquired by AT&T (NYSE:T) in a $39 billion deal. That was scuttled at the end of December 2011 after regulators made it clear the deal would never pass muster. T-Mobile walked away from the broken engagement quite a bit richer, both in terms of cash and the AWS spectrum in 128 markets areas that AT&T gave it as a parting gift. During 2012, T-Mobile also cut high-profile deals for AWS spectrum from Verizon Wireless (NYSE:VZ) and Leap Wireless (NASDAQ:LEAP).
Only two months after the AT&T deal sank, T-Mobile announced in late February 2012 a $4 billion plan to drastically rework its network and refarm its 1900 MHz PCS and 1700 MHz AWS spectrum holdings, enabling it to shift HSPA+ from its 1700 MHz AWS spectrum to make room for LTE. At the same time, it would refarm its 1900 MHz spectrum from 100 percent GSM to mostly HSPA+ service with a bit of the 2G stuff remaining on the side.
Three months later, T-Mobile named Ericsson (NASDAQ:ERIC) and Nokia Siemens Networks as the primary infrastructure suppliers for the modernization effort. And a mere seven months after the February modernization announcement, T-Mobile launched HSPA+ service on its 1900 MHz PCS spectrum in Las Vegas, the first full market where it has refarmed its HSPA+ spectrum. T-Mobile is also starting to turn up its HSPA+ service in the 1900 MHz band in other cities such as Seattle, Washington, D.C., and the New York City metro area. Ray has promised that the company will have a "material" footprint of refarmed 1900 MHz spectrum by year-end.
This is an operator in warp drive, and Legere indicates the MetroPCS deal will not slow down T-Mobile one bit.
T-Mobile plans to merge MetroPCS' existing LTE network into its own planned LTE network and to refarm MetroPCS' 1900 MHz CDMA spectrum for HSPA+ services. And rather than just deploying 10X10 LTE service as it had planned, T-Mobile will now be able to offer 20x20 MHz LTE service in many areas."
"What we're outlining for you is actually a very seamless, simple extension of this network modernization plan. Our network's prepared, customers migrate to it, we refarm the CDMA spectrum (owned by MetroPCS) for additional capability, and we also then move some of our own HSPA+ to LTE," Legere said.
The plan is being aided by an unusual set of circumstances in which the two operators' each own 1900 MHz and AWS spectrum, and their incompatible 3G mobile networks both happen to be on migration paths to LTE.
"This opportunity to really start early migration of MetroPCS customers onto the T-Mobile network is unique. This is completely dissimilar from network integrations and migrations that we've seen historically in the U.S." said Ray.
Back in 2011, FierceWireless named Neville Ray a "rising star in wireless." We were right about that, and now that Ray's new CEO has elevated him to "rock star" status, the industry will be watching closely to see whether this particular rock opera actually realizes its potential and ends with an impressive technological crescendo.
Be sure to vote in the poll on the FierceBroadbandWireless home page to let us know if you think T-Mobile can pull off its ambitious plans and also check out this link for more FierceWireless articles on the merger. Special Report: T-Mobile USA and MetroPCS merge: Complete coverage--Tammy
This column was updated Oct.5 to note this is one of the largest mobile network mergers in U.S. history.