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Category Archives: LTE

Busy with LTE and HSPA+, T-Mobile Takes on MetroPCS Merger

T-Mobile, already busy with its massive network modernization, appears to be taking its merger with MetroPCS in stride.

Barely two weeks from the deal’s closing, the system integration of T-Mobile and MetroPCS has already begun, with a system cutover in Las Vegas, J. Braxton Carter, T-Mobile CFO, told the 41st Annual J.P. Morgan Global Technology, Media and Telecom Conference on May 15 in Boston.

“We are doing that within two weeks of closing [on the MetroPCS merger]. There were questions about how soon we would be in a position to combine these two businesses. The fact of the matter is it is going to happen very quickly,” Carter said.

Additionally, T-Mobile plans to quickly expand the MetroPCS brand to 15 major metropolitan areas, covering 100 million additional pops, Carter said.

“We are going very quickly. The rollout will be measured in quarters not years,” Carter said. “We will leverage existing backhaul and interconnection facilities. Because we don’t have to build an entirely new network, it allows us in a very short time span to roll out, beginning in the third and four quarters and continuing the expansion into 2014.”

T-Mobile’s capital expenditures for the first quarter of 2013 were $1.1 billion, accelerating the network modernization program, which is on pace to cover 200 million pops with LTE by the end of 2013. In the first quarter 2013, the carrier launched LTE in seven major metropolitan areas and upgraded 16,000 sites with HSPA+ at 1900 MHz.

Neville Ray, T-Mobile CTO, said he was pleased with the pace of network modernization last year and this year, the bulk of which will be complete by the end of 2013.

“Our goal for the year of modernizing the network with HSPA+ in the 1900-MHz band over 170 million pops is in the bag. Our refarmed spectrum is driving growth,” Ray said. “We said we would hit 100 million pops with LTE by midyear [excluding MetroPCS]. We will have done that and more. We will hit 200 million pops of modernized network including LTE, and we will be in position to ease off in 2014.”

T-Mobile is looking to expand its network in 2014–2015 through spectrum it plans to purchase at auctions, which is “a far more cost-effective way of going forward with network expansion,” Ray said.

AT&T’s Project VIP Ahead of Schedule and Still Ramping

AT&T’s Project Velocity IP (VIP) is running ahead of schedule with nearly 200 million LTE POPs covered to date, and the carrier expects to complete almost 90 percent of 300 million POPs by the end of this year, John Stephens, senior executive VP and CFO, told AT&T’s first quarter earnings call.

“It’s still early, but we already have made tremendous progress with our LTE deployment,” he said. “The LTE network also is operating at high [network performance] levels.”

Capital expenditures for the first quarter were $4.3 billion with more than half going to wireless. Total capex is expected to be $21 billion as Project VIP ramps up. However, AT&T is lowering its long-term capex to the $20 billion range for both 2014 and 2015, according to Stephens, down from the $22 billion level that was announced as part of project VIP last November.

“This reduction brings no slowdown in our project VIP deployment. As we refine our VIP planning, we are seeing greater integration efficiencies in our spending curves,” he said. “Our LTE build is accelerating into this year’s spending. That along with additional savings in non-Project VIP spending gives us confidence to revise our expectations without changing our overall build target.”

The driver of Project VIP, mobile data, continues to increase service revenue, which now represents a $20 billion annualized stream growing at 21 percent. Smartphone subscribers, which now make up 70 percent of AT&T’s postpaid base, increased by more than 1.2 million in the quarter and by more than 7.1 million in the last 12 months. 

VoLTE Spells More Towers — Taiclet

The wireless infrastructure industry can expect to deploy significantly more cell sites as voice over LTE is implemented, James Taiclet, president, CEO and chairman of American Tower, told the first quarter earnings call.

“Based on recent independent technical assessments that we’ve commissioned, we now believe that VoLTE will result in significant network densification or cell splitting for coverage in suburban, highway and rural areas,” Taiclet said. “We believe VoLTE is likely to necessitate further network densification even beyond data as we move forward, and we think it presents significant opportunities for tower leasing as VoLTE is deployed.”

Because the current LTE network architecture doesn’t include traditional 2G/3G voice services, carriers must move beyond data-only LTE to provide voice and SMS alongside LTE mobile broadband, Taiclet said. Circuit-switched networks that carry voice will be converted to all-IP VoLTE networks. Carriers will benefit from cost advantages and greater spectral efficiency.

“By utilizing VoLTE, carriers can achieve increased efficiency regarding their wireless spectrum and also eventually reassign some of this spectrum to 4G data and entertainment services,” Taiclet said. “And finally, for CDMA providers like Verizon, VoLTE will allow simultaneous voice and data sessions on phones with the single chipset, thereby improving the user experience while reducing device costs.”

Taiclet said Verizon and AT&T are expected to complete phase one of their initial LTE overlays on their existing networks within six to 12 months, while Sprint and T-Mobile are expected to finish in 18 months to two years. Phase one has consisted of 80 percent amendments and 20 percent new collocations.

“However, given that LTE handset penetration is currently below 10 percent in the United States, phase one networks will simply not be able to keep pace with the volume of data that will be generated as more consumers switch to high-bandwidth 4G handsets and tablets,” Taiclet said.

In phase two of the LTE buildout, carriers will focus on increasing capacity and improving signal quality at the edges of existing cells through cell splitting and network densification. Verizon has indicated that it will begin implementing VoLTE in the next 12 months.

VoLTE requires more towers, Taiclet said. The packet-switched nature of VoLTE is more vulnerable to signal degradation than an LTE data session or a circuit-switched voice session.

“In a typical data session over LTE, a subscriber moving away from a cell site can usually handle some degree of signal degradation,” Taiclet said. “Conversely with a voice over LTE, the listener must continuously be able to comprehend what the person on the other line is saying in order for the session to be successful. Therefore, the quality of service requirement is elevated, especially at the outer ranges of cell sites.”

To avoid garbled or dropped voice calls, the effective radius of a VoLTE cell site could be reduced by 10 to 20 percent, Taiclet said. So cell sites must be closer together.

“The exact amount of further cell site identification to deliver high-quality VoLTE service depends on a number of factors, including existing network layout and spectrum characteristics,” he said. “But our initial estimates indicate that networks may ultimately have to be up to 20 to 30 percent more dense than an already densified data-only LTE equivalent network.”

NewCore Wireless To Deploy Ericsson LTE network

NewCore Wireless, a hosted wireless service provider that is owned by and serves rural operators, has selected Ericsson as its LTE vendor.

Ericsson will supply its Evolved Packet Core LTE solution to NewCore, along with an LTE radio access network to New Core Wireless’ partner rural operators. NewCore will work with Ericsson and wireless system integrator Stutler Technologies on the deployment, which will include network design, rollout and optimization.

The LTE network and infrastructure will be launched April 1, 2013, building on NewCore Wireless’ existing end-to-end 3G network, which was implemented in 2009.

The agreement marks the beginning of a new managed services partnership between NewCore and Ericsson. After the deployment, Ericsson will assist with network monitoring, analysing, optimization and support.

NewCore was formed in August 2008 by several rural independent local exchange carriers and deployed a 2G/3G network, consisting of an Alcatel Lucent core with ALU 3G RAN and Nokia 2G RAN in May 2009. It currently provides switching services to 200 GSM sites and 100 UMTS sites in a six-state coverage area –– Minnesota, Wisconsin. Michigan’s Upper Peninsula, Iowa, Nebraska and North Dakota.

Currently rural operators have agreed to build out LTE in six states with NewCore, including Montana and Colorado. NewCore hopes to expand LTE coverage to 17 states, from Ohio to Idaho.

“Ericsson was chosen because it is the only RAN vendor used by all four Tier 1 US operator,” said Cami Zimmer, business development, NewCore. “Ericsson has adopted the Nortel Tier three customer culture and has the best support for rural operators, which is important to us because that is who partner with [to provide wireless service].”

Zimmer said Ericsson’s relationships with the major carriers, along NewCore Wireless’s relationship, will aid in establishing the data roaming agreements that will be needed for LTE service.

“One of our goals is to successfully deploy 3G/4G services with access to nationwide networks,” Zimmer said.

While population density is not an issue, rural areas benefit from LTE because it provides an alternative to fiber to the home for fixed data, integrating cellular capabilities with traditional telephone service.

The Evolved Packet Core is an IP-based core network architecture that supports the next generation of mobile and fixed-mobile converged networks. Combined with LTE access networks, EPC provides users with broadband access to a variety of applications. New Core Wireless will be able provide its rural operator business partners with an enhanced fixed and mobile-broadband experience offering higher data speeds and faster access to a wide range of new innovative multimedia applications.

“The machine-to-machine communications opportunities are going to be great for rural areas,” Zimmer said. “There are lots of agricultural and telehealthcare applications, for farmers to monitor crops and for families to receive care from their doctors.”

DT’s U.S. CAPEX Investment in 2013 Good for Towers

Deutsche Telecom is putting its money where its mouth is in the coming year, funding T-Mobile’s  LTE and HSPA + rollouts, according to Rene Obermann, CEO, Deutsche Telecom,  at the carrier’s Capital Markets Day, Dec. 6, in Bonn, Germany.

The biggest chunk of Deutsche Telecom’s total CAPEX next year will be spent in the United States to the tune of $4.7B to $4.8B, compared with the last three years, which averaged $2.7B. Then it will drop to $3B in 2014 and 2015.

“While the company had already announced plans to spend $4B on its U.S. network modernization plan, we view this longer-term spend as especially positive in terms of further visibility for the tower sector’s pipeline,” wrote Jennifer Fritzsche, Wells Fargo senior analyst, a research note. “Recall, all three major tower players (AMT, CCI and SBAC) have secured master lease agreements.”

Flush with cash and additional spectrum from the failed AT&T/T-Mobile merger, Deutsche Telecom is spending CAPEX on refarming the spectrum in the PCS band, as well as network modernization. More than 37,000 sites are being modernized in 2012 and 2013.

“T-Mobile gained more spectrum in a deal with Verizon, which enabled us to build a more efficient network and to have better LTE coverage, and we announced a tower transaction worth $2.5 billion gives a chance to maintain our operational flexibility,” Obermann said.