MetroPCS takes a generational Leap to 4G

MetroPCS has a little extra incentive to deploy Long-Term Evolution (LTE) over its competitors. Unlike most of the major wireless operators in the US, MetroPCS has no 3G network, making it the first operator in the world to make the jump from 2G directly to 4G. So while other operators are looking to LTE for a more efficient and higher capacity network, MetroPCS wants to bring mobile broadband to its customers for the first time.

According to CEO Roger Linquist, Metro was at crossroads. Its large-scale rollout of wireless services in the US didn't occur until after it gained its advanced wireless service (AWS) spectrum in 2006. As it rolled out its CDMA 1X network in some of the country's largest markets, 3G wouldn't have been too difficult, requiring only upgrading some of its voice channels to EV-DO. But Metro ultimately decided against it, Linquist said. The CDMA 3G ecosystem had already passed maturity, and 4G was just around the corner. With LTE, Metro saw an opportunity to start fresh with a much more efficient and much higher capacity network—one that would not only allow it to support the capabilities of today's smartphones but prepare it for the high-bandwidth 4G applications of the future.

"From a cost standpoint, LTE will bring us a 10X cost savings over EV-DO," Linquist said of LTE's operational efficiencies. EV-DO might be a simple upgrade compared to buying new spectrum and building a new network, but why invest in a technology it would be forced to phase out?

But making the jump directly to LTE presents MetroPCS with a much different set of ecosystem requirements than it does Verizon Wireless. Both plan to launch their networks commercially this year, but while Verizon plans to use its network for data cards and then move into the next generation of mobile data devices, Metro needs to outfit the 3G devices of today for LTE. It's already gotten smartphone commitments from Samsung, and in the next 18 months, it has the ambitious goal of having three to five dual-mode LTE handsets on its network.

Metro's initial 4G plans may be grounded in the data services of today, but it has even bigger ambitions for the LTE network. As an operator that targets budget and mid-range wireless spenders, Metro's holy grail is VoIP, which only becomes possible over 4G. CDMA technologies have become very efficient in their most recent releases, supporting as many as 160 simultaneous calls over a single 1.25 MHz 1X carrier. It's unlikely that VoIP delivered over LTE will be much more spectrally efficient than that. VoIP, however, will drive down operational costs, merging Metro's voice and data onto a single IP infrastructure, which in turn can allow Metro to offer more competitive plans to its core customer base, Linquist said.

"We would like to be on the leading edge of that trend," Linquist said. "VoIP represents a substantial cost reduction."

In fact, Metro believes it can take the cord-cutter strategy that has served it well in the 2G world and apply it to broadband data. Just as many Metro customers signing up for its all-you-can-eat monthly voice plans opt not to have a home phone, many of those customers might choose to cut the cord on their home broadband connections if a 4G alternative is available, Linquist said. But Metro isn't thinking about getting into the broadband ISP business. Rather, Linquist believes that mobile data services and devices are becoming so sophisticated that the concepts of mobile vs. fixed Internet experiences are blurring.

"We think there is a fairly large segment that we serve that feels once they get a 3-inch or larger screen, that's all they need for a good Internet experience," Linquist said. Metro only needs to provide the right connection.