US: A Key 4G Proving Ground

(Feb 22 2011) 3G , LTE , Mobile Broadband , WiMAX

1. By Chris Nicoll, distinguished research fellow, and Tole Hart, senior analyst, Yankee Group

   The U.S. is fast becoming the key proving ground for 4G developments. In fact, six U.S. carriers—-AT&T, Clearwire, MetroPCS, Sprint, T-Mobile and Verizon—-are rolling out networks based on WiMAX, HSPA+ and LTE (Yankee Group defines "4G networks" as networks based on those three technologies). What sets the U.S. market apart is the fierce competition that will ensue as such a large number of operators offer 4G services in the same geographic areas with varied go-to-market models.

   The stated plans of all six carriers follow.

   • AT&T: AT&T joined the 4G marketing battle in early 2011 with its HSPA+ enhancements. Its LTE network will be rolled out to 70-75 million points of presence (PoPs) in the second half of 2011. Its plan is to have close to 100 percent LTE coverage by year-end 2013. AT&T is behind Verizon by six months in LTE deployment. 
   • Clearwire: Clearwire currently has 120 million PoPs covered in the U.S. as of year-end 2010, and it has the only nationwide WiMAX network in the U.S. Current owners are Sprint, Comcast and Time Warner Cable; however, funding issues have recently surfaced that may impact future network build-outs. Clearwire has gone public with its TD-LTE service tests showing near-100 Mbps service, putting into question future technology plans. 
   • MetroPCS: MetroPCS' 4G LTE network currently serves 12 of its 13 core markets in the U.S., including Atlanta, Boston, Dallas/Fort Worth, Detroit, Jacksonville, Miami, Orlando, Los Angeles, New York City, Philadelphia, Sacramento and San Francisco. At launch, it had 80 percent coverage of these cities, and its plan is to have its LTE network completely built out by the end of 2011.
   • Sprint: Sprint was first to market with 4G and is a majority owner of Clearwire. The company uses the Clear WiMAX network for its 4G data services, while it runs voice over its own 3G network. The Sprint/Clear network currently covers more than 110 million PoPs in the U.S., and it is quickly moving into Tier 1 markets. The company still has to deal with Clearwire debt issues that could hamper further 4G network build-out. Sprint will also be using its Network Vision plan, which allows new technologies to be offered at 800 MHz, 1.9 GHz and 2.3 GHz.
   • T-Mobile: T-Mobile currently covers more than 200 million PoPs--including the top 100 major metro areas—with HSPA+ 21. By mid-year 2011, it will have its HSPA+ 42 network covering 140 million PoPs, or around 25 of the major metro areas. With HSPA+ 21, T-Mobile's users experience an average of 5-8 Mbps download speeds, and HSPA+ 42 technology is expected to double that. 
   • Verizon: Verizon is the first U.S. carrier to go to market with 4G. Its current LTE network runs at 700 MHz and covers over 110 million PoPs. Its plan is to have two-thirds of its network upgraded to LTE by mid-year 2012, with the entire network migrated over by year-end 2013. Verizon's 700 MHz spectrum enables it to provide coverage with fewer base stations while gaining better in-building wireless service penetration. 

   Understanding the developments in the U.S. 4G market will give operators and content providers a better idea of where they need to invest and how best to formulate market strategies. One lesson learned from the 3G world is that first to market does not guarantee dominance. Other factors such as coverage, device and content strategy, and pricing options all play a role in determining 4G market leadership.

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