DT to Step Up U.S. Operations with More Spectrum, Faster Network
T-Mobile USA is expected to make a turnaround this year, parent company Deutsche Telekom CEO Rene Obermann said Thursday on the company’s investor day. The company’s 54 MHz of spectrum in core markets is enough for now, but more spectrum will be needed for growth, he said.
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Obermann expects T-Mobile to produce $3 billion revenue by 2014 and reduce its churn to about 2 percent this year and below 1.8 percent by 2012. 2011 is “an inflection point where T-Mobile will grow again,” said T-Mobile USA CEO Philipp Humm, who took over last year. The company is exploring ways to acquire spectrum and reduce its disadvantage to larger competitors in economies of scale, including through partnerships, Obermann said. It would consider selling noncore assets like cell towers to raise money, he said, but the company is in good position now, so there’s no rush to sell assets. Obermann didn’t say when a sale would happen or how much additional spectrum would cost beyond that the amount would be “significant."
The carrier wants to use the 1.9 GHz spectrum supporting its GSM network instead to supplement the 1.7 and 2.1 GHz spectrum used for its HSPA+ network, executives said. With about one-third of customers having moved to HSPA+, the carrier expects to start switching some of the spectrum starting 2012, they said. The company will also stop selling 2G-only devices.
The carrier plans to expand the coverage of its network to 290 million potential customers by adding about 5,000 cell sites and more-efficient wireless technologies, said T-Mobile Chief Technology Officer Neville Ray. The effort will allow the carrier to reduce roaming costs, he said. To support data services, the carrier seeks to deploy fiber backhaul to 87 percent of its HPSA+ towers by Q3, he said. It will also work on distributed antenna system and Wi-Fi technologies, Ray said. Humm acknowledged that the company hasn’t done a good job of communicating Wi-Fi calling capabilities to customers. Describing Wi-Fi calling as a huge opportunity, Humm said T-Mobile will have a broad Wi-Fi portfolio across all Android and BlackBerry smartphones.
Key to the turnaround plan is the HPSA+ network that the carrier calls 4G, Humm said. The carrier seeks to continue to upgrade its network for higher speeds -- 42 Mbps downlink by the end of the year and theoretical speeds up to 84 Mbps in 2012, he said. The upgrade will allow the carrier to offer speeds comparable with the latest LTE networks, executives said. Humm conceded that the company launched 3G late in the U.S.
T-Mobile will be aggressive on prices. The company seeks to offer more smartphones “well below” $100 this summer, Humm said. “Our mission is to make the latest services and devices affordable and easy for everybody,” he said. “That’s why we have entry level data plans that start at $10.” Another priority for the company is to prevent bill shock, he said.