T-Mobile USA Moves to 7.2 Mbps, Plans 21 Mbps

There are times when being late to market is actually a benefit. The latest entrants in any technology-based market have access to the latest technology, and can build their business plans around that fact. There are other times when it's a bit difficult to characterize a particular competitor's position.

That is where T-Mobile USA now sits, for example. T-Mobile USA was the last of the top-four U.S. mobile providers to build a 3G network, and it has uncertain plans for 4G. But the company is on track to have faster versions of 3G up and running before some of its major competitors.

The company had no 3G customers in the second quarter 2008, though it had acquired 3G spectrum. But the 3G network now covers 240 cities and passes 170 million people, with plans to extend coverage to 200 million people by the end of 2009, at which point nearly all major urban areas will be covered.

So here's where the "last shall be first" principle applies.T-Mobile is using the faster 7.2 HSPA air interface, running at 7.2 Mbps downstream, on all its 3G nodes by the end of 2009.

At least one of T-Mobile's primary competitors is upgrading less-capacious 3.6 HSPA networks to 7.2 HSPA, but will not have that conversion completed until the end of 2011.

Likewise, T-Mobile plans to upgrade even the 7.2 HSPA network to HSPA+, a 21 Mbps network. The company says it will start rolling out HSPA+ in 2010. T-Mobile says the upgrade will be a relatively low-cost and relatively easy upgrade.

Of course, the reason T-Mobile's position is complex is that it has not yet announced a specific method for deploying a 4G network, which will require additional spectrum.

Both AT&T and Verizon are building their 4G networks for substantial coverage by 2010, while AT&T will have substantial coverage in 2011. Sprint is banking on the Clearwire network for 4G.

Still, competition in the mobile broadband market might not primarily be about "feeds and speeds." Coverage, pricing, application stores and device exclusivity arguably are more important.

Nor is it yet entirely clear that 4G will offer an entirely new consumer marketing proposition, beyond "faster." European 3G networks languished for years with sluggish uptake because the compelling new services requiring a 3G network were not in place.

In the U.S. market, it has been the mobile Web that has driven an upsurge of 3G uptake. But that adoption was based in part on applications and capabilitiesm, in part on use of particular devices, which require use of the 3G network.

The question for 4G networks is what new value or application will drive uptake.

Perhaps no new discrete driver will be required. Maybe "more" will be sufficient. But as Verizon has so far discovered with its FiOS fiber to the home feature, consumers still need a reason to buy fiber access as compared to hybrid fiber-copper access.

Providers can be last or first. Either way, the applications and device capabilities will remain the drivers of adoption.