Rural LTE: Bluegrass builds LTE in Band 12 and 13 while iWireless considers LTE options

SAN ANTONIO, Texas--LTE remained the overarching topic of conversation here at the Competitive Carriers Association conference, with some smaller carriers opting to hold off on the technology while others plunged full-steam ahead into the market for high-speed wireless connections. The issue continues to remain critical as Sprint (NYSE:S) looks to partner with smaller operators for LTE buildouts, while vendors like Ericsson (NASDAQ:ERIC) work to sell LTE equipment to new customers.

One carrier that has remained on the LTE sidelines so far is iWireless, a T-Mobile US (NYSE:TMUS) affiliate (T-Mobile owns a stake in iWireless) that owns and operates a network that covers most of Iowa. Craven Shumaker, iWireless' president and CEO, said that the company has been upgrading its network to HSPA+ technology for the past two years, including the network in Des Moines that it bought from T-Mobile last year.

Shumaker said the iWireless continues to evaluate its LTE options but said the company has made no decisions yet.

On the flip side is Bluegrass Cellular, which operates two separate LTE networks. The carrier was the first rural operator to sign on to Verizon Wireless' (NYSE:VZ) LTE in Rural America Program. Verizon currently has 20 operators signed on to its program, which allows rural carriers to lease Verizon's 700 MHz Band 13 spectrum and build out a network that seamlessly roams onto Verizon's nationwide LTE network. Verizon LRA participants also get access to Verizon's device portfolio. Verizon today said LRA networks cover 2.2 million people, more than 58,000 square miles and service more than 300,000 people every day.

"We want to be looked at as a Tier 1 carrier," explained Barry Nothstine, vice president of sales and marketing at Bluegrass, which operates in Kentucky. Nothstine said Bluegrass' partnership with Verizon has been very successful, allowing the carrier to offer nationwide LTE services (Bluegrass also has other roaming partners). Verizon's LRA program "has been a great program for us," he said.

Interestingly, Bluegrass also owns Band 12 700 MHz A Block spectrum that it purchased in the FCC's 700 MHz auction in 2008. Bluegrass last year launched a fixed wireless service on the spectrum, providing in-home Internet service under the GetSetGo brand, with network vendor Ericsson. The launch is notable since a number of other 700 MHz A Block spectrum owners have declined to build networks on the spectrum, arguing that there aren't enough devices and equipment to support mobile operations in the band.

Indeed, Sprint this week announced a major new effort to entice smaller operators to build out LTE networks on their 700 MHz A Block spectrum and then connect those networks to Sprint's own LTE network--an effort similar to Verizon's LRA program. Sprint has even agreed to insert Band 12 support into some of its devices starting next year in an effort to encourage the deployment of 700 MHz A Block Band 12 LTE networks.

Nothstine said Bluegrass is evaluating Sprint's new program but hasn't made any decisions about whether it will participate.

Of course, Bluegrass isn't the only small carrier that has deployed LTE. Network vendor Ericsson said that Cellcom in Wisconsin, Chariton Valley in Missouri, Dickey Rural Networks in North Dakota, Flat Wireless (branded as ClearTalk) in Texas, Glenwood Telecommunications in Nebraska, GTA Teleguam in Guam, Infrastructure Networks in North Dakota, Ketchikan Public Utilities in Alaska, Panhandle Telecommunication Systems (branded as PTCI) in Oklahoma, Rainbow Communications in Kansas and Sully Telephone in Iowa are among the smaller carriers that have recently deployed LTE equipment from Ericsson.

Aside from LTE, both Bluegrass and iWireless pointed to smartphones as a critical element to their current business operations. Shumaker said iWireless' iPhone launch in December has been very successful for the company, surpassing his own sales expectations. He said that iWireless isn't planning to sell tablets, but will continue to add to its smartphone device portfolio.

Nothstine too said Bluegrass has enjoyed significant smartphone sales. He said fully 80 percent of the carrier's new and returning customers--both prepaid and postpaid--are now choosing smartphones. "If we don't have the handsets … that's a big problem for us," he said, declining to provide customer numbers for Bluegrass.

Interestingly, Shumaker said that iWireless has enjoyed a bump recently due to T-Mobile's "uncarrier" marketing push. Though he declined to provide customer or sales figures, he said that T-Mobile's uncarrier effort "has been very successful for us."

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