T-Mobile Ready to Rival Verizon’s LTE Network

The fourth largest carrier in the U.S. is set to offer the fastest mobile broadband speeds yet. T-Mobile announced Tuesday that 55 markets now have access to the operator’s 42 Mbps network. The first device equipped to use the fast mobile broadband, a USB data stick called the Rocket 3.0, launches tomorrow for $99 after $50 mail-in rebate and with a two-year data plan commitment. T-Mobile will also sell the Rocket 3.0 off-contract for $199. Post-paid data plans will start at $29 per month, and T-Mobile voice customers receive a 20-percent discount on monthly mobile data pricing.
How will T-Mobile’s improved HSPA+ network rival Verizon’s (s vz) LTE offering, which launched in December of last year? While I haven’t tested T-Mobile’s 42 Mbps network, I did attend a demonstration of it at January’s Consumer Electronics Show. We’ll have to see a real-world scenario of course, but the demonstration showed consistent download speeds topping 28 Mbps. I’ve used Verizon’s LTE network on several occasions over the past six months — most recently with an LTE-capable MiFi — and haven’t seen such speeds offered by Verizon.
While the potential performance bodes well for T-Mobile, which says 150 million people will have access to improved network speeds by mid-year, there are two questions that come to mind. First is the matter of AT&T’s plan to purchase T-Mobile, because Tuesday’s news complicates matters even more. AT&T (s t) hopes to use T-Mobile’s 1700 MHz spectrum to roll out an LTE network. That makes sense on paper, but what if that initial LTE network is actually slower than the updated 42 Mbps network T-Mobile is currently offering? LTE speeds can theoretically be faster than this, but among the major carriers, AT&T is the slowest in making its network faster.
The bigger question revolves around the pricing plans T-Mobile currently offers customers. Yesterday, the carrier revamped voice, text and data plans, for example. All the data aspects are unlimited with an asterisk, meaning customers are buying a set amount of data that will be provided at high speeds, but beyond that amount, speeds will be slowed. That seems counter-intuitive for a network product differentiating itself on speed alone. And the problem may become even more evident with the new 42 Mbps network. The faster a mobile broadband connection is, the more a consumer is likely to use it, so the amount of high-speed data offered in a plan gets used up that much faster.
Put another way: If the fast network becomes a slow network on the last week of every month, no asterisk in the world is going to make for happy customers on what might currently be the fastest mobile broadband network in the U.S.