Under pressure from stockholders, Sprint Nextel and T-Mobile USA — the third and fourth largest U.S. mobile phone carriers, respectively — are reported to be discussing the possibility of T-Mobile investing in Sprint’s Clearwire operation, reports the Wall Street Journal.
The Wall Street Journal says Sprint’s directors are debating allowing T-Mobile to invest in its Clearwire unit, which needs additional financing to complete the nationwide rollout of its 4G WiMax network. Sprint with 54 percent of Clearwire’s shares, can appoint seven of the company’s 13 board members, but major decisions require the approval of 10 board members.
Sprint has the lead now with the country’s only 4G network via Clearwire. But it will face competition later this year from industry leader Verizon Wireless and MetroPCS. Next year AT&T may begin LTE service. Roaming might be easier if everyone used LTE, although Verizon and ATT are using a different (700 MHz) frequency band.
An investment by T-Mobile could involve Clearwire’s TD-LTE trials planned for Arizona later this year.
“The trials are designed to fully utilize our spectrum footprint,”Dr. John Saw told Light Reading Mobile. The company has the spectrum to offer FDD-LTE services using the doubled 20MHz channels across the nation.
“We own an average 120 to 150MHz of spectrum in our markets,” explained Saw.
Clearwire owns most of the 2.6 GHz spectrum in the United States (above). They could divide it up in a number of ways. Right now Clearwire generally uses 10 MHz in each of 3 sectors for a total of 30 MHz.
WiMAX Release 2 (802.16m ) will use 4X2 MIMO in urban microcells, in a single 20 MHz TDD channel. The WiMAX Forum expects to see WiMAX Release 2 available commercially in 2011-2012. If they upgrade to (100 mbps) 802.16m, they’ll need double the spectrum (60MHz). That still leaves 60 MHz.
Verizon and AT&T will each use about 20 MHz in the 700 MHz band. They still have unused AWS frequencies. T-Mobile is using their AWS band now, for their national HSPA+ broadband rollout. After it’s gone, it’s gone.
T-Mobile paid $4.2 billion for 20 Mhz of nationwide AWS spectrum (1700/2100 MHz) in 2006. How much would a 60 Mhz chunk of (2600 MHz) be worth? If someone made Sprint an $8 – $10 billion offer for 60MHz, then Sprint could hardly ignore it.
T-Mobile is not desperate. They might also get 10 MHz of 4G spectrum from satellite provider Lightsquared a lot cheaper. That company probably needs the cell towers of T-Mobile to create its nationwide terrestrial network. That could moderate the price that T-Mobile is willing to pay. Meanwhile, Cricket, MetroPCS and Virgin Mobile are more “virtual networks”, and might use Clearwire’s spectrum for their own LTE service. Meanwhile Verizon, AT&T (and Comcast) are sitting on vast reserves of AWS spectrum they could tap if they need spectrum.
There are a couple of wild cards in this deck:
Comcast and Time-Warner are sitting on $2.4 billion in AWS spectrum. Later they bought into Clearwire, to the tune of $1.6 billion. That allows them to resell Clearwire WiMAX. Or AWS.
- Then there’s Google. They only have $500 million in the Clearwire pot, but they’re motivated by cheap broadband, not expensive broadband. Google could lead a rebellion of content providers and discontents. It’s politically dangerous, but a matter of life or death for print. Mass media will be killed by cellular fees if they don’t act.
- Craig McCaw has his own lightsabre. It’s called ICO. You want a nationwide, 20MHz LTE/WiMAX network? ICO can do it.
Clearwire plans to conduct LTE tests in the fall and throughout early 2011 in Phoenix, Arizona (see DW: Clearwire to Test LTE ). During the trials, Clearwire will collaborate with Beceem, and other partners, to determine the best methods for enabling end-user devices to take advantage of a potential multi-mode WiMAX/LTE network.
FDD LTE: Clearwire will conduct FDD LTE (Frequency Division Duplex) tests using 40 MHz of spectrum, paired in 20 MHz contiguous channels, of its 2.5 GHz spectrum. Clearwire expects real-world download speeds from 20-70 Mbps. This is expected to be significantly faster than the 5-12 Mbps speeds currently envisioned by other LTE deployments in the U.S., which will rely on smaller pairs of 10 Mhz channels or less.
- TDD LTE: Clearwire will concurrently test TDD LTE (Time Division Duplex), in a 20 MHz configuration, which is twice the channel size currently used in its 4G WiMAX deployments.
- WiMAX and LTE: Clearwire will also test WiMAX co-existence with both FDD LTE and TDD LTE to confirm the flexibility of its network and spectrum strength to simultaneously support a wide-range of devices across its all-IP network.
Beceem’s newest chip, the BCS500 supports both WiMAX 16e and the faster 16m standard, as well as LTE. The BCS500 chip supports both TDD and FDD LTE and 802.16m. No word on WiMAX devices using Beceem’s WiMAX/LTE chip. But it fits Sprint’s game plan.
In Boston, Clear’s WiMAX network is delivering 3-6 Mbps, roughly double the speed of T-Mobile’s HSPA+ network which is delivering about 2 Mbps in real world speeds, reports the Boston Globe.
TeliaSonera uses 20 MHz wide LTE channels, twice the bandwidth of Verizon’s 700MHz system. It uses the 2.6 GHz band – same as Clearwire’s WiMAX in the United States. Clearwire’s Phoenix LTE test will use Huawei gear, the same vendor that TeliaSonera is using.
TeliaSonera’s LTE network began commercial operation in Stockholm and Oslo in December 2009. They have three nation wide 4G/LTE licenses; in Sweden, Norway and Finland.
Mobile data traffic now surpasses voice and it will continue to grow indefinitely. Data will soon take 80% of traffic. Everyone knows that. The three major U.S. mobile operators control 90% of the market.
Related Dailywireless articles include; Clear Puck: Hat Trick?, Clearwire to Test LTE, Phoney Spectrum Scarcity, US Wireless Business: Good Margins, Clearwire to Test LTE, Cheat Sheet for Cellco Financials, WiMAX in More Cities, LTE Plans Leaked, Sprint Nextel: LTE/WiMAX Double Header?, Denmark Getting LTE, Qualcomm Gets Indian Partners, India’s Broadband Auction: It’s Done, 4G Auction in UK by 2011, AT&T Data Caps Extend to Femtocells, AT&T’s New Data Plans, T-Mobile: Now HSPA+ Coverage for 75M, Public Safety: Show Us The Money, Clear: No Limits, FCC to Okay $2.3B AT&T Deal, Cellcos: One Thing – Bandwidth, T-Mobile Eyeing Clear Spectrum, FCC Considers Auctioning Off TV Frequencies, FCC Okays Terrestrial LTE for SkyTerra, Battle of the Bands Goes to Congress, D-Block: It’s Done; Congress Pays
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