MetroPCS Yet Again Beats the Telecom Giants
Rajesh is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
The fifth largest US wireless operator, MetroPCS Communications (NYSE: TMUS), was the first carrier to launch the LTE network in the US in September 2010. And now, the telecom provider added yet another feather to its cap. It accomplished another high point by becoming the world’s first carrier to make available Voice over LTE (VoLTE) service in the US along with a handset which would support the technology. The company, which has around 9.3 million subscribers, plans to roll out the VoLTE service and also offer smartphones that would run on its latest platform in the near future.
Despite being a regional carrier, the company made an attempt to work in this area. Let’s check out how the first mover expects to take advantage of this piece of innovation.
How does this help the Carrier and its Users?
The company’s move towards deploying the 4G LTE and its present attempt to get into the VoLTE service will enable it to use the spectrum more efficiently and thus enhance its network capacity and reduce cost. Converting its customers to VoLTE services would help the company to free up some spectrum which is presently being consumed for providing voice and data services on its CDMA network. It also aims towards building the foundation for its forthcoming Rich Communications Services (RCS) that MetroPCS expects to start on late this year.
Now what exactly the VoLTE does
The Voice over LTE transmits voice calls over the LTE network by converting the voice into data. This helps the carriers to economically use the airwaves by using the more efficient LTE technology that gives much cleaner and clearer voice quality. So, the 3G spectrum that is being currently used can be relaxed for the deployment of the other network.
While this is the case with the regional prepaid carrier, what’s up with its fellow players?
The face-off between MetroPCS and fellow rivals
MetroPCS has come up with this advanced technique, while bigger carriers are yet to catch up. Verizon's (NYSE: VZ) and AT&T’s (NYSE: T) existing 4G LTE provides 4G speed only for data, but the voice services still runs on the its 3G network. This is where MetroPCS customers will have an advantage. Customers who own the LG Connect 4G offered by MetroPCS can take advantage of VoLTE and enjoy a better communication experience. This handset is very close to LG Viper 4G LTE that Sprint (NYSE: S) introduced in its last quarter.
Verizon tested voice calls over its LTE network in February last year and by the end of this year the top carrier plans to cover about 230 million Americans under its 4G network along with introducing its first VoIP-powered LTE phones. The wireless provider plans to target enterprise customers for its VoIP services. AT&T expects to have its VoLTE in place by 2013.
The third largest operator, Sprint, also proposes to consider moving to VoLTE next year. But of all the national carriers, Sprint would be the most desperate one to convert voice to IP network. This is so because the faster it processes to adopt the VoLTE, the sooner it will be able to reform the spectrum currently being used for the CDMA network. Sprint’s partner Clearwire (NASDAQ: CLWR) is scheduling the release of the VoLTE in the middle of next year when it plans to launch its TD-LTE network. Finally, T-Mobile’s VoLTE is not in the picture yet. The carrier is yet to launch the LTE and that is a year away.
This is exactly what impresses me about MetroPCS. The transition from a 3G to 4G network will assist the carrier to improve its network capacity. While other national carriers were in no rush to come up with the new VoLTE service, this carrier took the lead. Verizon and AT&T may be way ahead of MetroPCS in terms of the number of subscribers, yet they have a lot to learn from this not-so-big player. The regional carrier in true sense has turned out to be the LTE trendsetter.
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