Inside T-Mobile's notion of 4G

T-Mobile (NYSE:DT) is angling for a fight with the other operators over the definition of 4G. Today it dropped all pretense of using 4G as a descriptor of the speeds of its 3G service and just started calling its high-speed packet access plus (HSPA+) network a “4G network”. The other operators already had problems with T-Mobile claiming its HSPA+ network delivered “4G speeds,” though they couldn’t really argue with that statement. Now that T-Mobile is bluntly stating it has a 4G network on par with their WiMax and long-term evolution (LTE) networks, those operators are sure to be livid.

My bet is T-Mobile won’t budge. If anything, the company will point to the fact that the other operators are technically using the 4G moniker incorrectly, and that T-Mobile is doing just what Sprint (NYSE:S) did when it first launched WiMax, using the 4G name to distinguish its new high-capacity mobile broadband network from its older slower networks. The difference is T-Mobile didn’t have to invest billions of dollars to build it—it upgraded the old one.

For those of you confused by this, there are basically three competing definitions of 4G out there:

- The official standards bodies’ engineering definition requires a 4G network to support downlink speeds in excess of 100 Mb/s and a host of other features that LTE and WiMax networks can’t offer today. The nearest official 4G technologies are LTE Advanced and WiMax 2.0 based on the IEEE 802.16m standard—both years away from commercial readiness.

- The commonly accepted definition among operators is that 4G is an all-IP mobile broadband technology using orthogonal frequency division multiplexing access (OFDMA) in the air interface—namely WiMax and LTE. Sprint started this trend nearly four years ago when it started marketing its WiMax launch plans as the first 4G network. The industry quickly took up the mantle and 4G became the call word for all of the new networks being built beyond wideband CDMA and CDMA networks.

- T-Mobile’s renegade definition of 4G is banking on the notion that most of the industry is defining 4G primarily as a fast mobile broadband technology. LTE and WiMax networks deliver a lot more: low latency, greater capacities and operational efficiencies. But those nuances seem to have been lost on most everyone except for engineers, and the operators have helped reinforce the notion that 4G primarily means fast. T-Mobile figures it has those goods, why not deliver them under the 4G name?

What will be interesting to see is if T-Mobile’s ploy catches on around the world. There are hundreds of operators with no immediate plans to deploy LTE or WiMax. If they can market their 3G services as 4G, pitting them against their ‘true’ 4G competitors, they could buy themselves a lot of time before they need to make that LTE investment decision.

The LTE and WiMax operators won’t take this lying down of course. They’ll launch a barrage of counter-marketing touting their true 4G networks and decrying T-Mobile’s false 4G. But the onus of explaining the difference will fall on those LTE and WiMax operators. If the difference between 3G and 4G has come to mean faster speeds, and T-Mobile is delivering those faster speeds, how do you debunk its claims without descending into engineering speak?

Interestingly T-Mobile’s biggest threat to other operators may not be its use or misuse of the term 4G, but in good old pricing competition. On Monday, T-Mobile announced a 200 MB data plan at $10 a month with a contract and even unveiled a new unlimited tethering plan for $15 a month, half of what the other operators are pricing such services at. T-Mobile isn’t just coming out of the gates with a disruptive marketing campaign; it aims to cause some havoc in the data pricing business model.