with Neville Ray, CTO of T-Mobile USA
At the Consumer Electronics Show in Las Vegas earlier this month T-Mobile USA made headlines with plans to upgrade its network to HSPA+ 42, which represents a doubling of the company's current networks speeds. Neville Ray, the company's CTO, sat down with FierceBroadbandWireless Editor In Chief Sue Marek at CES to talk about the company's move to HSPA+ 42, the ongoing debate over HSPA+ being designated a 4G technology and the important role backhaul plays in delivering the promised wireless data speeds. Interestingly, although T-Mobile was the first to designate HSPA+ as a 4G technology, Ray said the company has no plans to charge customers more to use 4G--a move that makes T-Mobile different from competitors such as Sprint Nextel (NYSE:S).
FierceBroadbandWireless: T-Mobile was the first to call HSPA+ a 4G technology. Now we are seeing AT&T Mobility (NYSE:T) follow T-Mobile's lead. Were you surprised by AT&T's decision to follow what you have done?
Ray: I don't think I'm surprised. I think they see the same opportunity and benefit. Clearly HSPA+ is delivering a vastly better customer experience. Certainly HSPA+ is better than some of the already launched branded 4G products and experiences. I think it makes good sense for them to be in the same position, or adopt the same position, as we have.
FierceBroadbandWireless: At the Consumer Electronics show, T-Mobile provided some additional details about its plan to upgrade from HSPA+ 21 to HSPA+ 42 sometime this year. How will you differentiate, or communicate the upgrade, to consumers?
Ray: I think some of that still has to be worked through. For us, there are a ton of benefits with HSPA+ 42 that are applicable to a lot of customers that are carrying 3G as well as 4G devices. One of the great benefits of HSPA+ 42 is that it improves the capacity and the speed and throughput across the cell. For example, if I'm a 7.2 Mbps 3G data user on the cell edge with 1 Mbps, I'm going to see 2 Mbps with HSPA+ 42. It's not just about driving the higher peak speeds. All of our customer base will see a better data experience--those with 3G and those with 4G devices.
And in the second half of the year we will launch smartphone and data stick products that can support the higher peak data speeds. Now those will be new devices so customers will have to buy those new products to get the full benefit of HSPA+ 42, but there will be benefits to our existing base--that's one of the key advantages of HSPA+. So in terms of how we market that message to our consumers, we have work to do. But it's not just about driving higher speeds, there are benefits to all our subscribers.
One thing we won't be doing is charging premiums to customers for a 4G experience. There will be no tolls or premiums from T-Mobile.
FierceBroadbandWireless: You were quoted at your press conference as saying that data traffic on your networks has doubled every seven months. How is that sustainable? That's a lot of growth in a short time, and at some point it seems that this growth will become a problem.
Ray: We are growing into new spectrum with our AWS spectrum assets that we purchased five years ago. We have benefited from growing into new spectrum. AT&T and Verizon have been growing their 3G product in their existing spectrum--all those iPhones are on the existing busy 3G spectrum.
The myTouch 4G is pulling down 1.2 GB of data per month. Yes that's a lot of traffic growth, but that tells us that we have users with a very different experience. That's 4G to me. It's not sitting on some device where the battery drains and my data usage is low. We have consumers that are consuming a lot of our service and that's exciting because it works well for them. Those are proof points that we are delivering a robust and strong 4G experience.
Everyone is going to need more spectrum at some point in time. In the future we are going to better leverage the spectrum that we have and a lot of the advantages of HSPA+ is that it helps with capacity growth on the network. Dual-carrier delivers capacity benefits, and much of the work that we are doing on terminals delivers capacity and efficiency benefits.
There is a host of ways to tackle the growth that is coming. It's not just all about spectrum. It's clearly part of the story but we are less worried about that in the near term. In the longer term we need to chart our course to figure out how to advance our spectrum position.
Refarming is a great opportunity for us. I think we will migrate customers from the 2G world to the 3G and 4G world, and we have been freeing up that 1900 MHz spectrum as we go to a 3G and 4G world. We have spectrum that we can repurpose as we migrate our base to 3G and 4G services.
FierceBroadbandWireless: But I know T-Mobile is still adding customers to its 2G network. I have talked to John Horn who heads up T-Mobile's M2M group and he said that many of his M2M customers are using the 2G network.
Ray: Yes, but M2M applications typically have very small usage on the network and they don't affect the refarming plan. The lion's share of the use on our network is 3G and 4G and on the AWS spectrum. The majority of the products that we have that are driving GSM usage are prepaid products and the data usage on those products is limited.
We have had good, strong migration of our base to 3G and now 4G. So growth from my perspective is a great problem to have because it's proving that we have something that is in demand. Our devices are delivering a great experience because they are consuming data.
FierceBroadbandWireless: You said that 70 percent of your backhaul network is now Ethernet. Will it be 100 percent at some time?
Ray: It doesn't make sense to equip 100 percent of the network with Ethernet backhaul. But we need to provide it for the majority of our network. AT&T has said by year-end something like two-thirds of their mobile broadband traffic will be using fiber backhaul, but that tells me they have a long way to go to get fiber to the majority of their cell sites.
Our position is that we don't call anything 4G unless we have a great radio and great backhaul capabilities. Our 200 million POPs that we say are covered with 4G include the backhaul.
When it comes to the network, backhaul is my least concern now. I have fiber to my cell sites so it is very scalable and the capability is there. Now we can concentrate on the radio improvements in the devices. We have gone from a world where devices were ahead of the network to a world where the network is ahead of the device.