T-Mobile USA plans LTE next year, keeps low-price focus

T-Mobile USA will roll out LTE next year, partly by using spectrum it is receiving in the wake of its failed merger with AT&T, the company said Thursday.

The fourth-largest U.S. mobile operator will pour US$4 billion into its network over the coming years, including $1.4 billion in incremental network investment in the next two years, to deploy LTE (Long Term Evolution) and expand the coverage of its HSPA+ (High-Speed Packet Access) network.

To do so, T-Mobile will reorganize its radio frequency spectrum holdings, in a process called "refarming," partly by taking spectrum now devoted to less-used 2G services and using it for 3G and 4G infrastructure. It vowed to continue providing 2G services, though about 90 percent of the devices it now sells are 3G and 4G smartphones.

The company's focus in the new network effort will be on "making amazing 4G services affordable," a continuation of its traditional strategy of competing with the dominant Verizon and AT&T through price. T-Mobile will also seek new MVNOs (mobile virtual network operators) to resell its services and expand its sales force.

T-Mobile plans to offer LTE in most of the top 50 U.S. markets, with a broad 20MHz of spectrum for faster LTE in most of the top 25 markets. It will also install new radios to improve HSPA+ performance. T-Mobile already offers HSPA+, which it has called "4G," but not yet LTE, which is more commonly called 4G and is at the center of a fast-growing device and equipment ecosystem.

After AT&T dropped its planned $39 billion merger with T-Mobile following opposition by regulators, AT&T said it would give T-Mobile $3 billion, a seven-year roaming agreement, and spectrum licenses in 128 markets.

Stephen Lawson covers mobile, storage and networking technologies for The IDG News Service. Follow Stephen on Twitter at @sdlawsonmedia. Stephen's e-mail address is stephen_lawson@idg.com

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