The industry is rallying around 4G technologies, so why is T-Mobile pursuing a 3G technology
I think it's interesting because T-Mobile certainly has a deep heritage with
|Mark McDiarmid, Senior Director of Engineering and
T-Mobile USA Inc.
LTE and 4G. We're a global leader in the technology development of LTE, and we actually have operations in Europe which are live with 4G technologies -- both WiMax and LTE. T-Mobile is pretty familiar with the technology development -- the maturity of the technology -- the economics of the technology and how it translates into the device ecosystem.
So, what does that mean for T-Mobile US?
Firstly, we know that consumers want to have a broad range of devices at great prices. They want to have smartphones that have not only great data experiences on browsing and Web access, but they want to have great voice experiences and great messaging. We think HSPA+ is the right technology to bring that to market right now, and there's evidence that we can get great devices at great prices -- both at the lower end of the market and at the higher of the market.
How will the HSPA+ upgrade affect existing 3G services, including voice and messaging?
One of the great benefits of HSPA+ is, as a technology, it's completely backward-compatible with 3G and the voice services and messaging services that customers enjoy today. For the vast majority of T-Mobile's 3G subscriber base, they're going to get a free upgrade here for their Internet browsing. HSPA+ is like a series of turbo chargers on the network that enhances the data experience dramatically. But it does not affect the traditional voice and messaging that we already have, so it's completely complementary. What role did the wireless ecosystem play in T-Mobile's HSPA+ deployment?
The ecosystem is really key to our strategy. Globally, there's a vast wealth of operators that are committing to HSPA+, and the momentum behind
the technology is building and reaching the point on the maturity curve where it's really beginning to deliver performance at the right price. If you look back in history and at the history of these radio technologies, I think Qualcomm quoted recently that it takes about five years for a technology to reach maturity, and I think they define maturity as 100 million subscribers globally. We're heading that way with HSPA+ right now -- where it's matured, it's refined, it's fairly economic to operate and the device ecosystem has really scaled.
We can have diversity of choice for consumers. LTE, of course, and WiMax are maturing but they're very much in the early part of their cycle, so it's a question of timing. And, for us, [it's] getting the right product into the marketplace. Being able to enhance the network and do that for existing customers is a really big benefit for T-Mobile. We have 5.2 million 3G subscribers right now who will benefit from this upgrade to our network. For LTE customers, they're going to have to buy a brand new device and how that works with their existing voice service at this stage is not so clear.
The scale of the ecosystem is incredibly important, and any decision an operator takes to veer off the track of mainstream usually comes at a price. If you look at the WiMax ecosystem today, clearly it's struggling to get scale and commitment from the chipset and device manufacturers…. One thing I think is certain is that the LTE ecosystem will be rich as it develops through time.
But what about the competition? Will HSPA+ be able to compete in an LTE world?
We can talk a little bit about the global perspective. The technology, at this stage, is suffering a little bit from LTE-hype syndrome. There's a lot of excitement in the marketplace about what LTE is going to do and very few proof points about what it can do.
Of course, [the perception] is very different if [you're] examining a technology that's been in place for some time and evolving to higher performance. It's often viewed as lagging the thing that's coming next.
But the proof point is clear. I think certainly there are many third-party tests that have been done now for HSPA+ and the so-called 4G technologies. I would just point you to some of those third-party tests -- the PC Magazine benchmark that was done by Sascha Segan and [his] team-- really sorted the woods out from the trees. You can clearly see HSPA+, even though we're literally just bringing it to market today, is on a track and that it's going to perform very well along LTE. On the flip side, I have to say, with HSPA+, looking into 2011, we have upgrades on the roadmap which are going to take the technology to a whole new level -- beyond where it is today. We're not concerned at this stage with the reality of what's going to happen next year.
Today, there's a lot of hype around what 4G really is and what it hopes to do…. We have a very
strong future with HSPA+ next year, in terms of some of the capabilities that we're going to bring
to market. We're certainly not at this point having any concerns about 4G today, what 4G can bring
to market next year and possibly thereafter. In terms of performance, we're feeling kind of
bullish. You mentioned earlier that T-Mobile's operations in Europe have embraced 4G technologies
instead of HSPA+. Why the difference in strategy?
What we've done in Europe with Deutsche Telekom is explore what I call underserved markets -- specifically Slovakia and the Czech Republic, and there's a much larger market in Austria. We've addressed those markets with LTE, in the case of Austria, WiMax [in other markets] and another variation of 3G mobile broadband. We've addressed those markets to tackle or unlock some of the value in the broadband space that hasn't been adequately addressed by fixed line. Those opportunities don't exist in the primary markets in Europe today, so we've done some very serious market exercises in both technology and proposition and market development.
We think that's relevant for certain markets in Europe and not so relevant for certain markets in Europe. In the U.S., we don't really have a shortage of fixed broadband services, and we think it's going to take time for wireless to begin to perform on the same footing as fixed broadband in this country. So it really has to do with the competitive environment.
Looking beyond HSPA+, can we expect to see T-Mobile USA migrate to a 4G technology in the near term?
It's fair to say with HSPA+, we have a technology that really delivers 4G speeds today and the third-party tests validate that. There are a lot of upgrades with HSPA+ coming next year that will materially improve and extend the performance again. There is no real concern about LTE at this stage.
We see a future where LTE begins to mature and deliver the price performance that we really need to benefit products we want to bring to market and sell to consumers. I think for us it's really about price performance. And LTE has a lot of maturing to do -- things like battery life and the integration of voice and messaging, which consumers really value. There are a lot of questions unanswered and those points of maturity are going to have to come, and it may take a few years to get there.
Let us know what you think about the story; email: Jessica Scarpati, News Writer