T-Mobile inked multi-year agreements with Ericsson and Nokia Siemens Networks (NSN) earlier this month to deploy its $4 billion 4G network. The agreements call for Release 10-capable equipment, also known as LTE Advanced, at 37,000 cell sites across T-Mobile’s network, beginning this year and completing in 2013.
The vendor announcement came on the heels of the FCC’s approval of the AT&T spectrum transfer to T-Mobile, which was part of the failed-merger agreement. With the infusion of the new spectrum in 128 markets, T-Mobile will launch LTE on AWS spectrum in 75 percent of the top 25 markets.
“Securing the additional spectrum from AT&T was a catalyst for T-Mobile’s planned launch of LTE in 2013,” a T-Mobile spokesperson said. “As part of our recently announced its 4G evolution strategy, the company will invest $4 billion over time on network modernization to improve existing voice and data coverage, which includes refarming 1900 MHz PCS spectrum currently being used for GSM to deploy HSPA+ 4G services, as well as deployment of LTE in 2013.” T-Mobile expects to reach broad deployment of LTE next year, with service in the vast majority of the top 50 markets.
T-Mobile believes it will be the first carrier in North America to rollout antenna-integrated radios (AIR), enabling accelerated deployment and reduced site loading. Ericsson launched its antenna-integrated radios at the Mobile World Congress in Barcelona last year. The technology is expected to reduce power consumption by 42 percent and drop installation time by a third. The AIR thechnology is the result of a strategic partnership between Ericsson and the antenna maker Kathrein.
“The company’s timing for LTE allows T-Mobile to take advantage of the latest and most advanced LTE technology infrastructure, improving the overall capacity and performance of its 4G network, while optimizing the company’s spectrum resources,” T-Mobile said in a press release.
T-Mobile is not done with HSPA+, however. It plans to launch 4G HSPA+ service in the 1900 MHz band in a number of markets by the end of the year, allowing for the use of the iPhone. Currently, it serves 229 markets with HSPA+.
Domestic rental and management segment revenue increased 10.6 percent to $465 million and operating profit increased 11.9 percent to $352.8 million for American Tower in the fourth quarter. Additionally, domestic core organic growth topped 8 percent, reflecting new leasing activity by AT&T and Verizon Wireless, according to a transcript of the fourth quarter earning call by Seeking Alpha
“This activity has been primarily generated by two of our largest customers as they continue to focus on deploying initial coverage for their 4G LTE networks nationwide,” said Thomas Bartlett, executive vice president, CFO and treasurer, on the fourth quarter earnings. “The remainder of our core growth was generated from the 850 sites we’ve acquired or constructed since the beginning of the fourth quarter of 2010, in addition to our newly acquired land interest.”
For the full year 2011, domestic rental and management revenue grew 11.4 percent to more than $1.74 billion, with domestic segment core revenue growth of 10.6 percent.
“We continued to see substantial leasing demand in the U.S. in 2011 … which along with the more than 450 communication sites and 1,700 third-party property interests we added during the year, led to these growth rates,” Bartlett said.
James Taiclet, American Tower chairman, president and CEO, noted that the tower company is set to achieve its goal of doubling its total site count from five years ago. In 2007, American had 22,400 sites in three countries, which is expected to have risen to 50,000 sites in 10 countries by the end of 2012.
“We still believe, based on direct interactions with many of our major customers, that tower-based macro sites will continue to be the primary choice for wide-area network development into the foreseeable future, with urban rooftops, distributed antenna systems and Wi-Fi offloads serving as complementary solutions,” Taiclet said. “As a result, we expect to continue to direct the bulk of our capex and acquisition spending to tower-based real estate.”
American Tower will continue to grow complementary coverage solutions, such as indoor DAS, on an organic basis, he added.
A Kentucky-based cellular provider, Bluegrass Cellular, is the first to take Verizon Wireless up on its offer to lease spectrum in the 700 MHz upper C block that will help speed its delivery of 4G LTE services.
“We see 4G and LTE as very important to the future for our rural customers,” Barry Nothstine, vice president, sales and marketing of Bluegrass Cellular, told AGL Bulletin. “This is a way to quickly offer the same types of products and data speeds that the Tier Ones do.”
The spectrum lease is a part of the LTE in Rural America program by which Verizon is seeking rural carriers to jump-start the deployment of next-generation wireless in rural communities throughout the nation and to fill in the white spaces in the carrier’s coverage map.
“We are seeking companies that can assist in bringing the benefits of 4G LTE service to rural areas that currently lack Verizon Wireless coverage,” Verizon Wireless said on its website. “Together, we will plan and coordinate a local LTE deployment schedule that makes sense for both Verizon Wireless and the rural company that we are collaborating with.”
The results of this program should be good for the tower industry, according to Nothstine.
“Whether it is companies taking part in Verizon’s LTE in Rural America program or building out their own networks, we believe there will be significant opportunities for the construction of new towers, because a lot of this spectrum comes with construction deadlines,” Nothstine said. “I believe there will be a lot of steel in the air because of this. This is going to be big for the industry.”
Smartphone growth is ratcheting up for Bluegrass. In January, sales stood at 5 percent. In the latest month, that number had grown to 20 percent. The company is forecasting 35 percent smartphone sales in 2011.
“We are somewhat behind the growth percentages of smartphones reported by the Tier One carriers, but not a lot,” Nothstine said. “Growing smartphone and data use is one of our big initiatives. An LTE strategy and a solid 3G strategy are important to our growth.”
Currently, Bluegrass sports a large 3G EVDO network. It expects 4G LTE speeds to be 5 to 12 megabits per second for downloading data and 2 to 5 Mbps for uploading data to a wireless device.
“As we were looking at our 4G strategy, we wanted to serve our customers at home, which is critical, but what this agreement allows us to do is build out the LTE network quickly in our coverage area so we can also serve Verizon’s customers or its partners in the Rural America program,” Nothstine said. “But the big win for us is that our customers will be able to use LTE services nationwide, anywhere Verizon has service.”
The Bluegrass Cellular network covers approximately 900,000 POPs in 38 counties throughout Kentucky. It owns and operates many of its towers and also uses space on structures owned by tower companies.