T-Mobile Promotes 4G Network With No Takers

T-Mobile says there is no need to switch to Sprint-Nextel (NYSE: S) to get the 4G speeds that Sprint WiMax offers. There is also no need to wait for the LTE 4G technology that AT&T (NYSE: T) and Verizon Wireless are about to launch. T-Mobile claims it has nearly nationwide 4G service now.

T-Mobile has kept its 4G service a secret. It is not mentioned as part of the news about the new networks being built by its larger rivals.

4G is about performance and today T-Mobile’s HSPA+ network is delivering 4G speeds that match and often beat WiMAX and are readily comparable to what early LTE will deliver. Our 4G network is capable of theoretical speeds up to 21Mbps and we have seen average download speeds approaching five Mbps

The HSPA+ network has download speeds comparable to wired broadband which should make it too attractive for people to resist. But T-Mobile’s claims have not brought it new customers because they are overstated.  The cellular service firm says it has “America’s Largest 4G Network,” a fact that it hardly supports in its statements about the service.

People also do not want 4G. The system may not work well. Most cellular applications work fine on 3G networks. The statement that “faster is better” may not convince the 280 million cellular service subscribers to switch carriers or to upgrade their current service.

Sprint fired the first salvo in the 4G war and it has spent $5 billion to build out its WiMax network with Clearwire (NASDAQ: CLWR). Sprint did not highlight its 4G subscriber growth rate in its last earnings release or on its earnings call. That is odd given how important it says the initiative is.

4G service is probably much less beneficial than it proponents claim. The service may be spotty. And, consumers may not care whether their phones connect to the internet any faster than they do now.

Douglas A. McIntyre