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T-Mobile USA makes unprecedented network expansion

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The gap between T-Mobile USA and the other national carriers, Cingular, Verizon Wireless and Sprint Nextel, has widened following the past year’s wave of mergers in the US mobile market.

Now the German owned player is looking to narrow the gulf somewhat by expanding the reach of its network through roaming deals, as a preparation for likely more ambitious moves such as acquisitions of regional carriers and purchase of 3G spectrum in the next round of auctions. With the new roaming agreements, T-Mobile has extended the reach of its network by 56 per cent, mainly through 850MHz partnerships that have put the carrier on a more competitive footing and mark a shift from its historic 1.9GHz-only platform.

Most of the increase in footprint has been in the West, Midwest and rural Northeast through partnerships with carriers such as Alltel, Cingular, Centennial Communications, Dobson Communications, Edge Wireless and Rural Cellular. This has added more than 500,000 square miles of coverage.

The carrier has also turned on about 3,500 new towers of its own during the past year, compensating in part for its shortage of spectrum compared to rivals, which it hopes to address in this summer’s 1.7GHz and 2.1GHz auctions. T-Mobile will start commercial 3G roll-out later this year. Meanwhile, it has been changing its handset mix so that nearly all of its devices can now take advantage of the 850MHz roaming agreements.

Many analysts believe T-Mobile USA will go further and look to roll up a series of regional GSM carriers such as Dobson, Centennial, Suncom and Rural Cellular, which have significant 850MHz holdings. Dobson is strong in the Midwest, South and Alaska; Centennial in the upper Midwest and South; Suncom in the Southeast and Puerto Rico; and Rural Cellular in the Northeast, Northwest and South. Such operators are struggling to remain competitive especially as larger rivals begin to shift to 3G, which regionals may not be able to afford to build.

Copyright © 2006, Wireless Watch

Wireless Watch is published by Rethink Research, a London-based IT publishing and consulting firm. This weekly newsletter delivers in-depth analysis and market research of mobile and wireless for business. Subscription details are here.

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