MetroPCS became the first 4G LTE carrier in the U.S. Tuesday with the launch of the Samsung Craft phone and a 4G network in Las Vegas. But the nation's fifth-largest carrier's path to 4G is unique. Rather than advertising screaming, cable-modem-like Internet speeds, it's looking to use 4G to advance its mission of "wireless for all" - providing decent connectivity to lots of people at very low monthly rates.
"We're creating a platform for the future, for the next 10 years and beyond," said Ed Chao, MetroPCS's senior vice president for engineering and network operations.
Metro's initial 4G offering looks a heck of a lot like 3G. The company is charging $55 or $60 per month to use a $299 feature phone that surfs the Web, streams TV programs, and downloads music at 3G-like speeds. This is all new for MetroPCS, and it brings it up to par with the 3G services on other carriers.
(For more on the Samsung Craft and its 4G services, read PCMag's hands on.)
MetroPCS, you see, never had 3G. It experimented with 3G in Dallas and Detroit, but decided not to build it out. It has been growing steadily and charging low using an old 2G, CDMA 1X network, which is fine for voice and texting, but has limited capacity and dialup-like Internet speeds. The carrier is also squeezed for wireless spectrum in some of its cities, and it wants to grow.
MetroPCS currently has about 7.6 million subscribers, and its network covers about a third of the U.S. population.
A Different Approach to 4G
MetroPCS's take on 4G is very different from its competitors'. Verizon Wireless will introduce LTE later this year with PC modems, not phones, and it hasn't shown much interest in voice over 4G in the near term. Sprint has two 4G WiMAX phones on the market, but it also isnt' looking at WiMAX as a replacement for 3G voice, at least for now. AT&T, T-Mobile, and Cricket are all holding back on LTE until prices drop.
"We are on track to deliver a live [LTE] network covering about 100 million people by the end of this year in 25-30 major metro areas," Verizon Wireless spokesman Jeff Nelson said. "We expect … laptop connectivity at first, with consumer handsets to follow around mid-year 2011."
MetroPCS has no plans to use 4G to provide Internet hotspots or PC modems. MetroPCS just doesn't see the value in competing with DSL; PCs tend to use massive amounts of data, and MetroPCS is focused on keeping rates low and plans unlimited.
"Cards and dongles are the most commodity-like segment of the market," MetroPCS CEO Roger Linquist said. "We see our opportunity in handsets."
Verizon, AT&T, and Sprint are also all looking at 4G as additional networks, on new spectrum. Only MetroPCS seems to be looking at 4G as a replacement for its existing network as soon as possible. That may take five or 10 years, but it wants to "refarm" its spectrum, moving its 2G customers over to 4G where you can get faster speeds and far more voice calls in the same airspace.
"We want to get off of CDMA quickly," Chao said.
To that end, MetroPCS is moving aggressively towards VOLTE - voice-over-LTE, a new standard that's just now being finalized. VOLTE phones may also be able to do voice-over-Wi-Fi, so when MetroPCS brings them out in late 2011, it will be able to use Wi-Fi hotspots to supplement its network.
The Samsung Craft will be MetroPCS's only 4G phone in 2010, but many more devices are coming next year. Android smartphones from "multiple manufacturers" are at the top of the list; sources tell me that Kyocera, Huawei, and Samsung are all interested in providing devices.
For a while, though, 4G will be a bit of an odd experience. While the new 4G phones will physically support 3G, MetroPCS doesn't have any 3G roaming agreements. That means that if you can't find 4G or Wi-fi, speeds will drop to 2G.
Keeping 4G Cheap
It's hard to square MetroPCS's position as the first LTE carrier with its focus on low costs. Not only is it first to market, it's doing a lot of unusual things with LTE. Verizon and AT&T are introducing LTE on the 700-MHz band; MetroPCS is doing 1700 MHz. MetroPCS is also using an unusual range of channel sizes for LTE, from very narrow 1.4-MHz channels up to 10 MHz; Verizon and AT&T are only looking at 10 MHz and above.
At Cricket's Capital Market Days last month, Cricket's senior vice president for engineering and technical operations, Colin Holland, said that MetroPCS's top low-cost competitor was putting off LTE for another year and a half because the equipment and handsets were simply too expensive for now. Cricket wants affordable base stations and $150 phones, he said, and that's just not going to happen until the end of 2011 at the earliest.
But MetroPCS has several tricks to lower LTE costs, Chao said. The company came into LTE so early that rather than paying high early-adopter prices, it's paying low beta-tester, "beachhead customer" prices. LTE equipment manufacturers needed a test customer on which to try out its skills, and MetroPCS volunteered. That created intense competition for MetroPCS's business, which meant low prices.
"We were the only girl at the dance," Chao said. "So all those economics you learn in B-school just went out the window."
By running LTE in an existing band, MetroPCS also saves buckets of money, Chao said. Here's the key: it doesn't need to put up any new antennas. That means no negotiations with local governments or land owners, no big construction projects, and no new Internet feeds to new cell sites. Where it does choose to put up new antennas - for instance, in Philadelphia, where their LTE cells will have to be tiny to make up for very limited spectrum - it uses a technology called DAS (distributed antenna systems), which has a bunch of cheap, small, dumb antennas connected via a very long tether to one central base station.
LTE has slightly different propagation characteristics than CDMA, but MetroPCS has been having very good results running a network in the exact same footprint as its 2G network, Chao said.
The lack of new cell sites is also letting MetroPCS build its network very quickly. It will have at least some 4G coverage in all of its markets by the end of the year, Chao said, and MetroPCS will spend 2011 filling in gaps.
"We're very pleased to see the portfolio that we're seeing here for 2011," Linquist said. "It's a beginning. It's not an endpoint. It's a beginning."