T-Mobile's 3G Rollout Lags Behind Competitors

Barry Levine, newsfactor.com Thu May 8, 12:24 PM ET

T-Mobile USA is now joining the 3G club. Earlier this week, the telecommunications company announced that it has begun the commercial rollout of its third-generation wireless network, starting with New York City.

T-Mobile said it will continue to roll out the high-speed data network to major metropolitan markets, and by the end of this year it expects to cover those cities where most of its subscribers use data services.

Playing Catch-Up

Cole Brodman, T-Mobile USA chief development officer, said his company's data and messaging services are among the highest in the industry. He added that T-Mobile benefits from the "extensive commercial experience of 3G in our European markets," where the technology is more prevalent.

3G service means faster speeds for using the Web or downloading content. Some T-Mobile handsets can operate on the UMTS portion of its 3G network, and they will automatically connect to the best available network in a given location -- either 3G or the older 2G GSM/GPRS/EDGE network.

The T-Mobile 3G network is UMTS/HSDPA, and the company said it will launch its first HSDPA device "in the coming months." Some users of other networks have reported that HSDPA generally provides speeds twice that of UMTS.

Sean Ryan, an analyst with industry research firm IDC, said that T-Mobile USA is "playing catch-up" with the other major carriers in the U.S. who already have 3G to some degree, including AT&T, Verizon, Sprint and Alltel.

Delay Due to U.S. Government

Current Analysis' Avi Greengart noted that the delay was caused, at least in part, by the U.S. government, which "stymied T-Mobile time and time again by holding onto the AWS spectrum" that is being used for the 3G network.

But even with a late start, he noted, the rollout is "an incredibly slow staggered release." Greengart also pointed out that T-Mobile is not announcing any 3G-specific data services, such as streaming video.

Both analysts said that, while T-Mobile is just getting around to 3G, its major competitors are already talking about or beginning to move into the next generation. For instance, Verizon Wireless, China Mobile, Vodafone, NTT DoCoMo, and others have begun planning for LTE, or Long-Term Evolution, which some observers have described as a "souped-up version of 3G."

At the moment, Greengart said, T-Mobile's slower move into 3G hasn't hurt it in revenue growth. "They've been growing for years," he pointed out, "and only now are we starting to see the other carriers report data revenues from anything other than short messaging services."

But Greengart predicted that, six months from now, when 3G social networks could be showing major revenue growth, T-Mobile's customer base may not be large enough to climb aboard that bandwagon.