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T-Mobile USA’s CEO said the company is in talks with Clearwire and cable companies about a possible joint venture, Reuters reported Thursday.
Speaking at an investor conference in Germany, Robert Dotson, T-Mobile USA’s CEO said that the wireless carrier was looking into creating a joint venture with Clearwire, which is building a nationwide 4G network and cable companies, to improve its wireless spectrum opportunities.
“We continue to look at JV opportunities for additional spectrum…there are a number of different options we look at, (we) have been talking with cable companies, with Clearwire,” the news service quoted him as saying.
The Federal Communications Commission suggested in its National Broadband Plan presented to Congress this weekthat it will make 500MHz of spectrum available for broadband within 10 years. The plan calls for 300MHz of that spectrum to be made available within five years.
But Dotson said that T-Mobile USA, the smallest of the four major wireless operators in the U.S., doesn’t plan to wait for additional spectrum to become available. Verizon Wireless, AT&T, and Sprint Nextel not only have more customers than T-Mobile, but these operators’ networks are larger. T-Mobile’s competitors also have more extensive 3G networks.
As the smallest major player, there has been much talk about T-Mobile’s prospects. The company has been losing customers over several quarters. And some experts have speculated the company would team up with smaller regional players, such as Leap Wireless or MetroPCS.
There were even rumblings that its parent company Deutsche Telekom might acquire Sprint Nextel. But given that the Leap, MetroPCS, and Sprint use a cellular technology based on CDMA, while T-Mobile uses a technology called GSM, it wouldn’t make much sense from a network perspective. Dotson dismissed these rumors, according to Reuters.
When asked if T-Mobile would consider a deal with Sprint Nextel, Reuters quoted him as saying: “What you never want to do is take one company that is going through challenges and take another company going through challenges”.
Still, Deutsche Telekom has indicated that it is exploring various options for the company. The Wall Street Journal reported in February that Deutsche Telekom was considering holding an initial public offering to raise more money to either spin off the company or expand its network.
T-Mobile got a late start to the 3G market, but the company is aggressively deploying its service. It spent $4.2 billion a few years back to buy spectrum in the Advanced Wireless Spectrum auction held by the FCC.But it did not bid on any spectrum in the most recent 700MHz spectrum auction. AT&T and Verizon Wireless did bid on that spectrum and they are using those licenses to build out their 4G networks using a technology called LTE or Long Term Evolution.
T-Mobile is deploying HSPA+ technology, which will increase the speed of its 3G network. The company has already deployed the service in Philadelphia and it expects to get more HSPA+ deployed by the end of the year.
Clearwire, which has funding from Sprint Nextel as well as the two major cable companies Comcast and Time Warner Cable, is building a nationwide 4G wireless network. The company is using a technology called WiMax, and it’s already deployed in more than two dozen cities.
Sprint, Comcast, and Time Warner Cable are already reselling the Clearwire service. Perhaps, T-Mobile is looking to get in on the action as well. The cable operators also have spectrum licenses that they bought in the AWS auction. Cox Communications is the only cable operator that has done anything with this spectrum. But it’s unlikely that any of the cable companies would build a nationwide network, so teaming with a nationwide carrier makes sense. T-Mobile could also be looking at ways to partner with the cable operators to get access to that spectrum as well.
Meanwhile, Verizon Wireless is aggressively moving toward 4G. It’s new network will go live in 25 to 30 markets by the end of the year, the company has said.
