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Wednesday, October 3, 2012

T-Mobile and MetroPCS - Dreams of AWS

What does the merger agreement between T-Mobile and MetroPCS mean on a market by market basis?  You can fully understand the plan unless you figure in the Verizon's spectrum holdings in the AWS band.  Above is a screenshot of the AllNet Labs Spectrum Landscape that depicts the uplink AWS spectrum positions in New York and Los Angeles.  As a reminder, uplink is the traffic that goes from the mobile device to the cell site. In the New York market Verizon owns 2 - 10MHz blocks of spectrum and T-Mobile owns 2-10MHz blocks of spectrum and 1-5MHz block of spectrum, assuming the merger receives approval.  Since the game for Verizon and T-Mobile now is 4G-LTE, both carriers would prefer to have the largest blocks of contiguous spectrum in this band as possible.  This will allow the maximum speeds out of their spectrum positions.  Since Verizon's New York spectrum is currently unused, I would expect Verizon and T-Mobile to exchange the F block channels with the A block channels.  In this scenario, Verizon would own a 1x20MHz channel and T-Mobile would own a 1x25MHz channel.  This is inline with T-Mobile's statement that the MetroPCS merger would provide it with a 1x20MHz LTE channel in most markets after the MetroPCS spectrum is recovered in roughly two years.

Los Angeles is a bit more complicated unless the AT&T spectrum transfers to T-Mobile have not been updated with the FCC.  With October data from the FCC, AT&T still holds very minor positions in the AWS band in several of the Top 20 markets.  Assuming this is an accurate picture of the Los Angeles spectrum, T-Mobile and Verizon could exchange B and F bands, which would provide no benefit to Verizon but would increase T-Mobile's maximum channel size to 1x15MHz.

Why getting the largest channel size within a spectrum band important?  The LTE Advance feature of Carrier Aggregation will allow you to combine channels in different spectrum bands to 'form' a larger data pipe, but carrier aggregation cannot combine two or more different channels within the same frequency band.  When we speak of frequency bands, we are referring to the distinct 700MHz, Cellular, Personal Communication Service (PCS), Advance Wireless Service (AWS), Wireless Communication Service (WCS), Broadband Radio Service (BRS), and Educational Broadcast Service (EBS) bands.

Any potential T-Mobile/Verizon trades are simplified by Verizon's unused spectrum.  Do you think we will begin to see trades involving spectrum that is in use?

1 comment:

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