Can U.S. Cell Phone Carriers Learn to Share?
The CEO of wireless carrier Cricket called for smaller carriers to start sharing their networks.
Why can’t America’s wireless carriers share? The CEO of the nation’s sixth-largest wireless carrier, Cricket’s Doug Hutchinson, called for smaller carriers to band together and share spectrum to offer better service in a speech at the Rural Cellular Association spring expo in Orlando today.
The RCA is a group including nearly every carrier in the U.S. except AT&T and Verizon, from third-place Sprint all the way down to tiny, two-county rural providers. In keynotes this morning, Sprint touted the advantages of its Network Vision program, which unifies its many networks and offers an opportunity for Sprint to host other carriers on its cell sites. Cricket took things a step further.
“We competitive carriers should explore spectrum and network sharing options,” Hutchinson said. “Operators in Europe already share network assets, and in the U.S., carriers have begun to approach shared networks.”
Sharing could let smaller carriers with less spectrum fight the big guys, as joined networks would combine to offer better bandwidth and lower cost, he said. The companies would still compete, with different handsets, service plans, customer service, stores and marketing.
Already, Verizon and Sprint have taken stabs at network sharing, with Verizon offering to share its spectrum with rural carriers willing to build out LTE in areas Verizon doesn’t want to cover, and Sprint proposing a now-abandoned deal with LightSquared.
Verizon’s rural carrier initiative is controversial because it locks partner carriers into using Verizon-compatible handsets, with mandatory network-related payments to Verizon.
Many rural carriers own a slice of 700MHz spectrum that they want to use for LTE, which is part of a group known as Band Class 12. The smaller carriers are worried that Verizon and AT&T won’t include Band Class 12 on their phones, preventing roaming onto potential new rural networks and reducing the rural carriers’ handset options for their own networks. Verizon has said that it owns spectrum that would require Class 12 support, so the rural carriers’ concerns are unfounded.
Hutchinson emphasized that data roaming with the major carriers is a big concern for the little guys, and said the FCC should ensure reasonable data roaming agreements are in place. The RCA has also been fighting to force the larger carriers to make their equipment interoperable with smaller carriers’ adjacent bands.
The move to LTE offers big opportunities for smaller carriers to band together, as it eliminates the traditional divide between CDMA and GSM phones, Hutchinson said. New radio chipsets can support CDMA and GSM as well, he said, letting rural carriers band together more easily.
“Negotiating network sharing agreements will not be easy,” but it may become necessary as a massive demand for wireless data means that spectrum will have to be used as efficiently as possible, Hutchinson said. More than 60 percent of Cricket’s handset sales in the fourth quarter of 2011 were smartphones, he said.
Cricket has about 6 million customers. While it covers about a third of the country with its own network, the company has an unusual nationwide deal with Sprint letting it resell Sprint 3G services under the Cricket name elsewhere. The carrier has LTE in one city, Tucson, and plans to cover 25 million people with LTE in 2012. For more, see PCMag’s Cricket phone reviews.
Earlier this week, the National Telecommunications and Information Administration (NTIA) released a report that found approximately 95 MHz of “prime” spectrum in the 1755-1850 MHz band that could be repurposed for wireless broadband use. Given the challenges of spectrum allocation, however, the report suggested a private-public partnership of sorts that “relies on a combination of relocating federal users and sharing spectrum between federal agencies and commercial users.”
By Sascha Segan, PCMag