LTE launches in the U.S. — MetroPCS style

As expected, MetroPCS (NYSE:PCS) beat out the big nationwide operators to long-term evolution, announcing today the commercial launch of its first network in Las Vegas as well as the availability of the industry’s first LTE phone, the Samsung Craft.

The milestone may be a significant one, but it’s not the flashiest of rollouts. Rather than launch a fancy new smartphone, the Craft is a BREW-based device similar to the feature phone portfolio Metro offers over its 2G CDMA 1X network. Instead of building a robust 4G network that can deliver 25 Mb/s-plus download speeds touted by other LTE operators, Metro has built more modest LTE networks, starting with 5 MHz-by-5MHz carriers in Las Vegas, with plans to scale down even smaller in future markets. And rather than rolling out a big footprint all at once, Metro is launching on a city-by-city basis as each network is completed and fully tested.

If Metro’s launch doesn’t sound like the type of 4G extravaganza a Verizon Wireless (NYSE:VZ, NYSE:VOD) or AT&T (NYSE:T) would stage, there’s a reason, said Tom Keys, chief operating officer for Metro. “We didn’t build this network or this device to be all things to all people,” he said. “We did this is in a very methodical fashion. We didn’t try to get everything in the beginning.”

MetroPCS never built an EV-DO overlay over its CDMA 1X network, meaning the LTE network will perform the duties of the 3G network it never had. That’s why it’s immediately launching with a phone rather than selling a data card service that other 4G operators either offer or plan to offer at launch. While it’s not out of the question that Metro will offer some kind of data card mobile broadband service, Keys said that market is already a pretty saturated one.

Meanwhile, Metro’s competence lies with the home-line cord-cutters who rack thousands of minutes of usage every month but are looking to pay lower rates than the national operators charge. As the mobile data revolution takes hold, though, those customers want access to mobile applications and high-speed access, Keys said. Metro’s 4G rollout is designed to support those customers as well as bring into the MetroPCS fold the increasing number of customers who find its low-rate unlimited calling plans appealing but would never switch due to its lack of a 3G network.

“We’re a no-contract service provider, so I have to do anything I can to get our customers to reinvest in MetroPCS,” Key said. “While I have to maintain those current customers, I also want to capture the hearts and minds of those customers who would have never contemplated moving to Metro before.”

With those goals in mind, MetroPCS is delivering a no-nonsense mobile broadband service. It’s keeping its low rates; its 4G service plans ranging between $55 and $60 a month; tax-and-fee-inclusive, including unlimited calling and voice; and, at least initially, unlimited data.

The Samsung Craft may not have a smartphone operating system, but it expands on the BREW services available to 2G feature customers and in the $60 plans comes with a Real Networks-powered multimedia service called MetroStudio, which offers up full-track music downloads and video content from NBC Universal, Black Entertainment Television and Univision. Though Android-based smartphones will eventually make it on to the MetroPCS network, Keys said supporting the Google (NASDAQ:GOOG) OS and the silicon necessary to support that OS on the Samsung Craft would have delayed the launch of the phone and raised its price considerably.

The Craft still has many advanced hardware features, such as its large active-matrix organic LED screen, a 3.2 megapixel camera, dual soft and hard keypads and includes a 2 GB MIcroSD card, putting it in the highest tier of feature phones. But MetroPCS is able to offer it unsubsidized for $350 with a $50 rebate, undercutting the price of most unsubsidized smartphones, while providing all of the data functionality that most of its customers want, Keys said.

As for the network, MetroPCS is looking to provide a comparable, if not better, experience to the smartphone services other operators offer today, Keys said. Consequently MetroPCS isn’t marketing any specific connection speeds, he added. While that seems almost antithetical in a market where operators are constantly touting the average download speeds of their current network technologies, MetroPCS is constrained by the spectrum it has available.

While it is able to deploy 5 MHz-by-5 MHz LTE in Las Vegas over the same advanced wireless service (AWS) spectrum over which it built its CDMA network, it won’t have the same luxury in all markets. Depending on where it launches, some of its LTE carriers may be as small as 1.25 MHz, the same size as a CDMA channel, meaning it will be able to deliver speeds only marginally faster than 3G. According to Keys, MetroPCS will manage its spectrum on a market-by-market basis, deploying both in the PCS and AWS bands. While there isn’t a set rollout schedule, he said to expect the next market launches in a few weeks and in 2011 to see 4G service in all of its markets.