Regional wireless operator Ntelos is set to begin rolling out LTE services across its network during the second half of next year, and to have 70% of its potential customers covered by the end of 2014, according to an investor filing by the carrier. The carrier noted that the LTE service would be targeting both its own customer base as well as serving the needs of its largest wholesale customer Sprint Nextel.
Ntelos noted that devices for the network would support Band Class 2, 4 and 25, hinting that the LTE service would tap into the traditional 1.9 GHz spectrum (Band Class 2) currently used to support its CDMA-based network as well as that of Sprint Nextel, Ntelos’ 1.7/2.1 GHz spectrum holdings (Band Class 4) and the G-Block 1.9 GHz spectrum (Band Class 25) that Sprint Nextel is using for its initial LTE rollout. Ntelos is currently using the approximately 23 megahertz of 1.9 GHz spectrum to support its CDMA services, with approximately 20 megahertz of 1.7/2.1 GHz spectrum that has yet to be deployed.
While Ntelos mentioned plans to support LTE roaming with Sprint Nextel, the carrier did note that there were still outstanding billing issues with its larger partner in the range of $8 million. Ntelos’ noted in the presentation that there was “continuing dialogue” in the matter.
Ntelos struck a network alliance deal with Sprint Nextel in 2007 covering CDMA services that is set to run through 2015. Ntelos reported that the agreement provides a minimum of $9 million per month in revenues. There is no word yet as to whether Sprint Nextel will sign a similar roaming agreement for LTE services with Ntelos. Sprint Nextel earlier this year signed an agreement with Shenandoah Telecommunications that calls for the network partner to mimic Sprint Nextel’s LTE plans, with Shenandoah receiving access to additional spectrum in the 1.9 GHz and 800 MHz band from Sprint Nextel.
A number of rural carriers and trade associations have bemoaned the lack of LTE roaming agreements available for smaller operators across the space. Some rural operators have been forced to either offer customers only pockets of service or have made spectrum leasing agreements in order to have access to nationwide roaming services.
In addition to its network plans, Ntelos also provide some insight into sales and impact of the iPhone since the carrier began carrying the device on April 20. Ntelos said it had sold 9,500 devices through the end of the second quarter, with 54% of those sales going to new customers. The carrier also reported that 30% of its customer base paid an early-termination fee to upgrade to the new device and that as of the end of the second quarter 6% of its postpaid customer base were iPhone customers.
That strong growth could have a fiscal impact on the carrier as along with other rural operators Ntelos was selling the iPhone 4S at a lower price than larger operators ($150 vs. $200). Ntelos recently began selling the iPhone 5, also at the $150 price point.
The device could be having a positive impact on the carrier’s operational results, as it released preliminary third quarter results that showed a year-over-year decline in customer churn from 3.69% in 2011 to 2.88% this year, while smartphone penetration of its customer base has nearly doubled to 52.7%.
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