with Neville Ray, CTO of T-Mobile USA
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Neville Ray |
T-Mobile USA and MetroPCS (NYSE:PCS) expect to close their planned merger sometime in the first half of next year. The deal will combine MetroPCS' 9.3 million customers with T-Mobile's base of 33.2 million customers. In addition, if regulators approve it, the deal will also enable T-Mobile to merge MetroPCS' existing LTE network into its own planned LTE network on AWS frequencies and refarm MetroPCS' 1900 MHz CDMA spectrum for HSPA+ services.
The combined company will have 76 MHz of total spectrum in the top 25 major metro areas. T-Mobile will also gain some new telecom infrastructure, such as some 6,000 distributed antenna system (DAS) nodes that MetroPCS has deployed. FierceBroadbandWireless Editor Tammy Parker recently spoke with T-Mobile CTO Neville Ray regarding MetroPCS, DAS and spectrum. The following is a slightly edited version of that conversation.
FierceBroadbandWireless: You're planning to decommission 90 percent of MetroPCS' cell sites because of coverage overlaps but keep 6,000 DAS nodes. What is so special about the DAS deployments?
Neville Ray: [MetroPCS] brings a lot of capacity and spectrum reuse with their DAS systems in some core, urban areas, and that's something we want to continue and leverage. There is some coverage benefit there, too. They've driven some really strong and deep in-building coverage from those DAS systems, which we think we can leverage. And we want to maintain that experience for those Metro customers as they come across to the larger, new network.
FierceBroadbandWireless: Was MetroPCS a lot more aggressive on DAS deployments than T-Mobile has been?
Ray: Absolutely. I give them credit. They've been more aggressive than anybody else has. There's no doubt on that. Some of that is driven by the spectrum position that they had, and the success of their customer base growth. But here I am, and another exciting thing is now I've got a small cell rollout in front me. It's done, with a large number of DAS nodes. And you can read into that: "small cells." It's not the classic version of small cells that we are generally looking at with HetNets and so on, but DAS is another version of that. It's driving much greater reuse and capacity of off the spectrum assets. So, we've done our share of DAS, but I would not say we've done it at the pace and volume that Metro has, and I do believe that's pretty unique.
FierceBroadbandWireless: Are the MetroPCS DAS networks in offices, public spaces or everywhere?
Ray: They've actually used DAS in key metro areas. You're looking at the boroughs of New York and downtown L.A. I think their needs for DAS were driven by high-density usage areas in these urban cores. That's something we've looked at and our evaluation is that's a valuable opportunity. It drives greater reuse from a spectral perspective. If you think about the density of that radio network and then bringing on top of it this large mass of LTE spectrum we will have, it puts us in a very, very strong place to grow our business and be highly competitive in the marketplace with the size and scale of the offering. Both companies have a strong history of driving customer value. T-Mobile's offering unlimited today, Metro's [already] done that for a period of time. So, we believe that's a great place to play in this marketplace to help drive scale and growth.
FierceBroadbandWireless: T-Mobile has been quite active in acquiring spectrum on the secondary market this year. If somebody gave you a box full of spectrum right now, which would you rather have: PCS or AWS?
Ray: I think at this point in time we'd go after AWS, but the combination (of T-Mobile and MetroPCS) is going to take us there. It's going to give us both. If I could, I'd always take some low-band spectrum too. Of course, there's a series of ongoing regulatory processes that could afford us those opportunities in coming years as well. This combination of AWS and PCS assets between T-Mobile and Metro is a tremendous one, and it's almost unique.
You look at what we can do with these incremental AWS and PCS assets on the back of national PCS and AWS assets, and really the only other company with a similar holding is Verizon (NYSE:VZ). Everybody's got PCS, right? But if you look at the AWS base, Sprint doesn't have any AWS spectrum. AT&T (NYSE:T) had to give us most of its AWS spectrum post-breakup, and so T-Mobile and Verizon are carving out the turf in the AWS landscape, and we end up in a very strong position.