T-Mobile takes on Verizon in Spectrum Wars
In a press release issued Wednesday, T-Mobile attacked Verizon's reasoning behind comments it made against T-Mobile in support of Big Red's purchase of AWS spectrum from a group of cable firms. Last month, the FCC told Verizon that it wanted the carrier to prove that it needed the additional spectrum next year, and wanted the three cable firms selling the licenses to explain why the trio could not use the spectrum for themselves. The Feds gave Verizon a March 22nd deadline and we are still waiting to hear from the FCC on whether it will green light the purchase by Verizon.
twice as efficient as T-Mobile. The latter has taken exception to this comment and shows where Verizon has gone wrong with its math. The latter divides each carrier's total subscribers by a average amount of spectrum. According to T-Mobile, this analysis is flawed because it is done on a nationwide basis when it should be done market-by-market because of the way that spectrum holdings and market share vary greatly in different markets.
Additionally, T-Mobile claims that in Verizon's calculations of T-Mobile's network, the mobile operator used spectrum that the latter has not taken possession of yet which makes T-Mobile look like it has much fewer subscribers than Verizon has for the same amount of spectrum. The spectrum being added to T-Mobile's total by Verizon is coming from AT&T as consolation for pulling out of the deal to acquire the company, and is awaiting FCC approval to have the appropriate license transferred. Ironically, in its calculations for its own figures, Verizon doesn't include the spectrum that it is waiting to hear about from the FCC which in effect gives the carrier the look of a much more efficient mobile operator.
T-Mobile also points out that smartphones use 35 times as much data as featurephones and that T-Mobile has a higher percentage of smartphone customers than Verizon. Additionally, Verizon has a majority of its spectrum in frequency bands under 1GHz which is more efficient than bands over 1GHz, which is where all of T-Mobile's spectrum lies.
Taking all of these conditions into account, T-Mobile says it is more efficient than Verizon in the Top 5 markets, 8 out of the top 10 and 31 out of the top 49. On average, says T-Mobile, it is 50% more efficient than Verizon which is a much different story than what Verizon is telling the FCC. And while T-Mobile is refarming its PCS and AWS technology for next-gen LTE service, it will still require more spectrum to have a national LTE rollout. As the carrier says, "As competitors like Verizon roll out LTE, it is important that T-Mobile be right there as well – bringing competition and choice to consumers."
T-Mobile says that the FCC should not allow Verizon to sink its hooks into the last block of currently available LTE enabled spectrum since Verizon would most likely sit on the spectrum whereas others, like T-Mobile, would put it to use immediately.
Verizon is on a buying spree these days – attempting to corner the spectrum market by purchasing one of the last remaining unused blocks of airwaves to create a stockpile. Verizon would have you believe its effort to purchase the cable companies’ Advanced Wireless Services (AWS) licenses in the 1.7 GHz band is but a “run of the mill” set of transactions that should be rubber-stamped by the FCC. Not true. These deals are anything but routine and, if granted, would unduly tip the scales in favor of the largest wireless carrier at a critical juncture in the mobile broadband industry.
To justify its continued buying binge, Verizon claims that it is one of the most efficient carriers in the world, and that it is two-times more efficient than T-Mobile. It doesn’t take long to find the flaws in Verizon’s claim. Here’s why:
First, Verizon’s analysis divides the carriers’ nationwide total subscribers by a nationwide average amount of spectrum. But mixing an absolute number of subscribers against a broad average of spectrum produces a pointless number. Because spectrum holdings and market share vary dramatically on a market-by-market basis, any meaningful analysis must be done at that level.
Second, Verizon includes spectrum in its calculation to which T-Mobile does not yet have access, making T-Mobile’s average appear lower. In particular, Verizon adds spectrum that T-Mobile will receive as a result of the break-up of its deal with AT&T even though the license transfer applications remain pending at the FCC. At the same time, Verizon fails to include the spectrum it is seeking to acquire against its own average.
Third, as Verizon acknowledges, not all wireless users place equal demands on the network and smartphones use approximately 35 times the data of feature phones. Verizon, nevertheless, declines to factor into its analysis that T-Mobile has a higher percentage of bandwidth-hungry smartphone customers than Verizon.
Fourth, and most importantly, Verizon fails to account for the fact that a majority of its own spectrum is in frequency bands below 1 GHz, which is considerably more efficient at providing coverage and capacity than spectrum above 1 GHz. All of T-Mobile’s spectrum is in the higher bands above 1 GHz.
An analysis that takes these factors into account reveals that T-Mobile is actually more efficient than Verizon is in all five of the top markets, eight of the top-10 markets, and 31 of the top-49 markets, and that, on average, T-Mobile is 50 percent more efficient than Verizon in the top markets. This is a very different picture than the one Verizon paints for the FCC and the public.
T-Mobile announced earlier this year that it would begin repurposing its existing PCS and AWS bands for the deployment of next generation LTE technology. Even with this effort to retool our bandwidth, however, we will need more spectrum to fully deploy LTE across the country.
As competitors like Verizon roll out LTE, it is important that T-Mobile be right there as well – bringing competition and choice to consumers. It is therefore no coincidence that Verizon moved aggressively to purchase the last remaining block of spectrum that carriers like T-Mobile and others could utilize to launch competitive services in competition with Verizon. Especially with the recent demise of our deal with AT&T, T-Mobile needs the right spectrum resources to remain a competitive force. The spectrum Verizon is seeking to acquire from the cable companies is uniquely situated to facilitate and expand T-Mobile’s LTE deployment.
T-Mobile has a history of buying spectrum and immediately using it – not buying it to bank it. After the 2006 FCC AWS, auction, we actively cleared a dozen incumbent federal government agencies from the 1.7 GHz band in record time to make way for 3G and 4G services. T-Mobile’s record stands in stark contrast to Verizon’s approach of buying large quantities of spectrum and letting it sit idle – in the case of AWS for five and a half years and counting. And, Verizon admits it retains plenty of capacity even as it seeks to stockpile another tranche of spectrum to meet some future demand. Indeed, Verizon’s chief financial officer recently noted that only five percent of its customer base is using its new LTE network at 700 MHz. The question for the FCC, therefore, is why Verizon should be permitted to acquire more spectrum before it has even started to use much of what it already has.
The simple answer is that Verizon’s effort to lock down the last remaining block of currently available LTE-appropriate spectrum should be denied. By doing so, the FCC would advance its pro-competitive goals for the wireless industry and create an environment in which the licenses could be made available to others who can put them to work immediately for the benefit of consumers.
1. CM_Punk (banned) posted on 04 Apr 2012, 23:52 2 12
Oh look, FCC abusing its power again. Tell me again, why are these blokes in charge? Thanks to them, our wireless spectrum sucks with all the data hungry Android phones available.
5. VZWuser76 posted on 05 Apr 2012, 00:52 7 1
Okay, so what do you think the FCC supposed to be doing? They manage spectrum available, whether for TV, radio, first responder, or wireless phones. Along with managing who gets what, they are also in charge of making sure that spectrum doesn't interfere, so you don't have someone talking about how awful their day was interfering with an air traffic controller trying to land a plane. A bunch of a holes, I know.
On a side note, would it be better if our wireless spectrum sucked because of all the data hungry iphones if there were no android or wp7 phones. If anything, apple is responsible for this. Before the iphone, most casual users didn't think about going to a smartphone. The only people with smartphones are the ones who actually needed them (ie the business crowd). But after people found out all the cool things they could do, they wanted in on it also. Add to that the fact that the pre-iphone smartphones hardly used any data. A 1 GB data plan would've been unheard of prior to 2007. What would you use all of that data for? Everyone likes to point out that the iphone ushered in the the modern smartphone age, so along with those kudos they need to accept the fact that it is also responsible for the data cruch we are currently in.
2. CommentBoxEnforcer posted on 04 Apr 2012, 23:57 2 2
right...but i stil like verizon..5+ yrs
3. RORYREVOLUTION posted on 04 Apr 2012, 23:57 11 6
Too bad data caps were started by iPhone users abuse.
4. KingKurogiii posted on 05 Apr 2012, 00:04 4 0
so what? was T-Mobile going to acquire the Spectrum? if so then i definitely think T-Mobile should have dibs but if this is just them being babies about Verizon making a serious move then they really need to just shut up and focus on rolling out their own LTE network.
8. Gcombs posted on 05 Apr 2012, 10:16 3 0
I agree. These companies are crying because they're not making smart business decisions and when another is making them they want to cry about it. T-Mobile you didn't go to these cable companies to try to strike a deal Verizon went to these companies with an offer. Geez this s**t is getting more and more ridiculous.
6. Forsaken77 posted on 05 Apr 2012, 01:08 3 0
I don't have either Tmobile or Verizon, but I think Tmobile is definately more efficient in their use of spectrum simply because they have to be. They have nowhere near the resources of Verizon and need to squeeze every last drop out of what they have just to stay competitive.
7. Beholder88 posted on 05 Apr 2012, 07:56 3 0
I'd like to see some actual numbers here. This is just showing that the two networks are bantering back and forth and claiming that one is more efficient than the other. A third party needs to step in and do some actual research, if only to shut everyone up. Sure, Verizon's smartphone mix isn't the highest, but they had more customers previous to the smartphone boom anyway. Verizon is more prepared for this, and the others are playing catch-up. I've had Verizon 4G for about 6 months now, and never had a problem. I wasn't even effected during the outages that were reported.
11. gwuhua1984 posted on 05 Apr 2012, 14:38 2 0
I'll give T-Mobile a thumb up on spectrum efficiency usage once they finish refarming the PCS band to HSDPA+ and get ready for LTE rollout.
12. oldmandaddy posted on 05 Apr 2012, 20:40 2 1
cry baby cry , att took 20millions costomers from t mobile since iphone launch and att gave t mobile 3 billions for not buying deal. don't cry baby your network sucks and only good thing is tmobile is cheappp!!!!
13. Battleraiser posted on 06 Apr 2012, 16:18 2 0
Tmobile and Sprint are both a dying company. Just go ahead, lay down, sale your parts, and let the big companies duke it out like men.