With the need for using 850 MHz spectrum for its TDMA network decreases, Cingular Wireless L.L.C. has been carving out blocks of the spectrum to use for the launch of its UMTS/HSDPA mobile broadband network.
The 850 MHz spectrum, prized for its propagation properties and ability to offer better in-building coverage, is being used by carriers not only for its advantages in voice coverage, but also for data services.
Cingular’s chief operating officer, Ralph de la Vega, sang the praises of running UMTS/HSDPA at 850 MHz during a recent call with analysts. He said that Cingular had been planning for the past two years on utilizing more of its 850 MHz holdings for 3G, since the demand for TDMA is decreasing as Cingular migrates customers to its GSM network. The carrier’s remaining 3.6 million TDMA customer account for only about 1 percent of its network traffic, company officials said.
“When we have launched markets at 850 [MHz], the coverage, the in-building penetration at 850 [MHz] is just outstanding,” de la Vega said. “You’re going to see us have a mix of [1.9 GHz] and wherever we can carve it out, 850 [MHz], because it just runs extremely well. … It really maximizes the use of our spectrum.”
Cingular spokesman Ritch Blasi added that since 850 MHz spectrum propagates better for both voice and data, the spectrum offers more flexibility in engineering the network. Cingular’s UMTS/HSDPA technology can use the same spectrum for both voice and data, while CDMA2000 1x EV-DO technology requires “clean” channels for voice and data separately. EV-DO Revision A, which is the next network step for both Sprint Nextel Corp. and Verizon Wireless, will offer CDMA carriers the capability to run both data and Voice over Internet Protocol services over the same channel.
Australian carrier Telstra also has launched an HSDPA network at 850 MHz, which was switched on earlier this month.
Among other U.S. carriers, T-Mobile USA Inc. plans to launch a UMTS network using the 1.7/2.1 GHz spectrum that it recently purchased in Auction 66.
Chris Smith, executive vice president of network services for Alltel Corp., said that since the majority of Alltel’s spectrum holdings are in the 850 MHz band, the company does all of its voice and data using that frequency “with the exception of a couple small markets.” Alltel plans to extend EV-DO Rev. 0 coverage to 60 percent of its covered potential customers by the end of this year.
“Eight-fifty is a lot better than [1.9 GHz] or anything else that’s out there today,” Smith said. The spectrum’s properties mean that fewer cell sites need to be used, he said, lowering transportation and maintenance costs and making the use of 850 MHz an attractive economic proposition as well.
“It’s good spectrum. We use it. There’s really no magic to it,” Smith said.
Smith said that since about mid-year, Alltel has been installing EV-DO Rev. A-capable network cards into its cell sites. He declined to comment on when those Rev. A capabilities might be turned on, except to say that the decision would be based on the economic case and Alltel’s marketing strategy.
Verizon Wireless declined to comment on its strategy for balancing the use of its spectrum for voice vs. data. However, the carrier has launched EV-DO service in markets such as San Antonio and Dallas, where it holds only 1.9 GHz spectrum; and in markets such as Sacramento, Calif., where it holds only 850 MHz spectrum.
Verizon Wireless’s spectrum portfolio includes holdings at both frequencies in the vast majority of the top 100 markets, according to tracking of carrier spectrum position by investment firm Raymond James. In the top 10 markets, Verizon Wireless averages 20 megahertz of 1.9 GHz spectrum, although the actual amount ranges from 10 megahertz to 40 megahertz, depending on the market. Its 850 MHz spectrum holdings are more consistent, with 25 megahertz in nine of the top 10.
Verizon Wireless spokesman Tom Pica would say only that “proximity of the site is more of an issue than the spectrum.”
Jonathan Atkin, analyst for RBC Capital Markets, said that good network engineering can be an equalizer across different types of technology and spectrum. He noted that Cingular’s handsets will default back to GSM and GPRS coverage in areas where UMTS coverage might be thin.
“At the end of the day, just because they’re able to do voice over UMTS, from a competitive standpoint it makes no difference at all,” Atkin said.
