There is no other market today that has shown such a great competition in the 4G environment as United States. People often talk about the "Big 4" U.S carriers, which in principle include Verizon Wireless, AT&T, T-Mobile and Sprint. Sooner or later, we will refer to them as the "Big 3" once AT&T and T-Mobile's merger is completed. There are several other smaller players in United States that are also fostering the 4G competition in the country, including MetroPCS and LightSquared.

Clearwire, in partnership with Sprint, covers 119M POPs with mobile WiMAX and is serving over 6 million subscribers. However, its network build-out will depend on the carrier's ability to raise additional funding, something with which Clearwire has been struggling for a while. Even though it owns almost half of Clearwire's venture, Sprint's wireless strategy going forward has yet to be determined. We believe it could involve any of the following:

- Remain with WiMAX through Clearwire.
- Deploy with Clearwire LTE in combination with WiMAX, or
- Deploy LTE separate from Clearwire.

Sprint's strategy going forward is dependent on the resolution of its dispute with Clearwire over wholesale revenue sharing. Although negotiations are currently ongoing, our best guess is that this dispute is unlikely to be resolved satisfactorily, and that Sprint will therefore decide to adopt LTE by itself. The company is expected to announce its decision in the second half of this year.

In the meantime, Verizon has nearly caught up to Clearwire, with LTE coverage of ~110M POPs in 38 markets. Verizon expects to hit 200M covered POPs by mid-2012 and its entire 3G footprint of 290M POPs by year-end 2013. Verizon has introduced two LTE smartphones, which have been a great hit! In just one month after the HTC Thunderbolt Smartphone was introduced, Verizon had reported over 260,000 subscribers using this device. The second smartphone introduced was the Samsung Droid Charge. LTE is crucial to Verizon's differentiation strategy. The big drive by Verizon is to get all its new Smartphones to have LTE, which differentiates them from AT&T.

AT&T, however will not remain behind Verizon Wireless and is planning to launch LTE in the second half of 2011. The merger with T-Mobile willincrease spectrum and capacity in very congested cities. By 2015, AT&T foresees that network data traffic will be 7x to 8x greater as compared to 2010., That means that in 2015, users will consume in 7 to 8 weeks the amount of traffic they consumed for the entire year 2010. AT&T will also rely a lot on its extensive WIFI network, which today comprises +24,000 hotspots. This merger will give AT&T and T-Mobile coverage of 95% of the US population with LTE.

It was obvious that AT&T was going to have to make a move like this to get spectrum to meet its customers' demands, since the carrier only has 28MHz in the 700MHz band, which will be mainly used for its LTE deployment. AT&T also has a chunk of AWS spectrum (about 56MHz), but this spectrum is being used mainly for its HSPA+ network. A&T is planning a $39 billion acquisition of T-Mobile, and late last year said it would purchase Qualcomm's 700MHz licenses for $1.93 billion.

All of the proposed transactions are pending approval from FCC. The transaction with T-Mobile, when approved, would make AT&T the largest carrier in the country, leaving Verizon in second position and Sprint a distant third. AT&T and Verizon combined market share will be nearly 80%. The main concern for Sprint and others behind this acquisition is that too much power will be in the hands of just two companies. AT&T and T-Mobile's combined customer base tops 120 million wireless subscribers. Verizon currently has 94 million, making it the largest carrier in the country, but it will drop to second once the merger goes through.

Of the smaller players, MetroPCS launched its LTE prepaid service in September and plans to cover its entire footprint by year-end 2011. The company is spectrum-constrained, however, with roughly 20 MHz in most markets in the 1.7-1.9GHz. As a result, the data speeds PCS is generating are far slower than those seen among the Big 4. MetroPCS will not represent much competition for the Big 4, but still will keep its position as the LTE pioneer in United States.

And we should not forget LightSquared, which is planning one of the most innovative and unique LTE deployments today. LightSquared plans to build out the first-in-the--world wide-scale hybrid LTE terrestrial and satellite network using L-Band spectrum (1.6GHz). LightSquared will operate a wholesale-only business model, making it the sole wireless provider of its kind in the U.S. market. After the acquisition of T-Mobile USA by AT&T becomes effective, LightSquared's LTE deployment will have to compete against two large ones (Verizon and AT&T-T-Mobile) and also Clearwire.

The United States will see greater competition in the wireless marketplace. This will result in new revenue opportunities, along with the benefits of increasing competition, innovation, and choice for end users. A lot of final decisions, however, are to be made by the main 4G players in the coming months.

For more information, contact the author at info@maravedis-bwa.com

Source: By Cintia Garza, Team Leader 4GCounts & Market Analyst CALA, Maravedis