T-Mobile's Ray: We're not interested in Verizon's 700 MHz spectrum

NEW ORLEANS--T-Mobile USA would be interested in acquiring lower-band spectrum, but that doesn't mean it is eyeing the Lower A and B Block 700 MHz frequencies Verizon Wireless (NYSE:VZ) has said it is willing to sell in order to win approval for it to acquire AWS spectrum from a group of cable operators.  

The vast majority of spectrum that Verizon is willing to dump is A Block, channel 52 spectrum, "but that is signal-challenged by channel 51 TV broadcasting," said T-Mobile CTO Neville Ray during a luncheon fireside chat with FierceWireless Editor-in-Chief Sue Marek during FierceWireless' The Path to 4G event at the CTIA Wireless 2012 conference on Tuesday.

"Our interest is limited at this point in time" in that spectrum, he added.

Ray took a jab at Verizon's attempt to acquire AWS frequencies from a group of cable operators. "They have a stockpile of spectrum in 700 (MHz) and AWS spectrum that they're not using," he said, "and yet they're interested in acquiring more AWS spectrum."

Ray was referring to Verizon's December agreement to pay $3.6 billion for the nationwide AWS spectrum licenses held by SpectrumCo, a joint venture of cable companies Comcast, Time Warner Cable and Bright House Networks. Separately, Verizon said it will buy Cox Communication's 20 MHz of AWS spectrum covering 28 million POPs for $315 million.

Now that it has named its LTE infrastructure vendors--Ericsson (NASDAQ:ERIC) and Nokia Siemens Networks--T-Mobile will move very quickly to refarm its current spectrum. Less than half of the operator's voice traffic is carried on its PCS 1900 MHz GSM network. "It makes sense for us to start liberating that spectrum," said Ray, adding that most of the operator's device sales activity is already in WCDMA smartphones rather than GSM handsets.

"There will potentially be some customer migration" due to refarming, said Ray, "but we hope we can retune and refarm without impacting the customer experience."

Under terms of its newly announced network contracts with Ericsson and NSN, T-Mobile will modernize its existing GSM infrastructure to glean more spectral efficiencies, enabling the operator to quickly introduce WCDMA /HSPA+, which T-Mobile now provides in the AWS 1700 MHz/2100 MHz band, to the PCS 1900 MHz band, a shift targeted for the fourth quarter of this year. The carrier will then deploy LTE in the AWS frequencies where it currently has WCDMA/HSPA+.

T-Mobile  will also leverage the AWS frequencies that it recently obtained from AT&T due to the FCC's scuttling of their merger in December 2011 "We're looking to put that spectrum to use as soon as we can," said Ray, noting the frequencies will initially be used to support T-Mobile's existing HSPA+ deployments or will go toward the carrier's LTE rollout.

T-Mobile is benefiting from the fact that other operators have already broken ground on LTE networks that use AWS spectrum, he said. Ray also said negotiations with device vendors regarding products compatible with LTE on AWS frequencies has gone much more smoothly than T-Mobile's negotiations five years ago when OEMs were reluctant to develop WCDMA/HSPA products for use on AWS.

Ray also contends that T-Mobile is well positioned to migrate its users to LTE, given that half of its subscriber base is already using HSPA or HSPA+ services. "We don't see that we have to rush to LTE," though T-Mobile is committed to rapidly accomplishing its overall network modernization effort in order to gain spectral efficiencies and refarm much of its 1900 MHz band to WCDMA/HSPA+.

T-Mobile structured its network modernization deals in only four months once the AT&T deal fell apart. Ray said T-Mobile's contracts with Ericsson and NSN are very similar, with each vendor being responsible for approximately the same number of POPs. The LTE portion of the deals is specifically for LTE Advanced Release 10 network infrastructure. Ray said the question for the industry is what will happen regarding LTE Advanced on the device roadmap.

"We're coming into LTE commercial services at a very good time," said Ray, noting the LTE ecosystem, though still relatively nascent, "is maturing well."

Ray also said that T-Mobile is "not in any huge rush for VoLTE." He noted Verizon is moving aggressively toward voice over LTE "because they have so many assets stranded on  CDMA." Ray reiterated his earlier statement from the Mobile World Congress that T-Mobile will be the first North American operator to widely deploy integrated radios.  He said T-Mobile has been examining the technology for at least four years, though it only recently became commercially viable.


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