RootMetrics: Verizon, T-Mobile lead in consistently fast 4G

Independent mobile network tester RootMetrics has completed its latest round of nationwide speed and reliability tests, and while the best overall performance award goes to Verizon, the speed prize that most tech geeks really care about was a bit of toss-up. Both Verizon and T-Mobile posted impressive 4G bandwidth numbers, reflecting big upgrades both made to their LTE networks in the last year.

Seattle-based Root no longer compiles an average speed number for a carrier’s entire coverage footprint, which is frankly a rather useless number for gauging overall network performance. Instead, it’s now showing the number of metro markets where a carrier’s average download speed hits a particular benchmark, such as 10 Mbps or 20 Mbps. (You can find Root’s individual city reports here.)

Verizon's average speeds in major markets

Verizon’s average speeds in major markets

Root found that in the last half of 2014 [company]Verizon[/company] averaged a 10 Mbps or better downlink connection in 122 cities, while [company]T-Mobile[/company] did the same in 96 cities (that’s out of a total of 125 markets). [company]AT&T[/company] wasn’t far behind with 93 cities pumping out 10 Mbps-plus speeds, but when you start moving the bar upwards, T-Mobile and Verizon really shine. In 41 cities, T-Mobile averaged 20 Mbps of faster speeds, while Verizon was producing similar fast connections in 40 markets. AT&T hit that benchmark in only 14 cities.

RootMetrics 2014 T-Mobile updated

At this time last year, AT&T held Root’s speed crown, but a lot can happen in a year. Verizon and T-Mobile have been tinkering a lot with their networks. Verizon turned on a brand-spanking-new LTE grid in the Advanced Wireless Services (AWS) band — what Big Red calls its XLTE network — doubling the speed and capacity of its original 4G service. Meanwhile T-Mobile has been playing musical chairs with its existing spectrum and airwaves its gotten through acquisition, producing 4G networks in many major markets that match Verizon’s megahertz for megahertz.

AT&T is upgrading its networks as well, but it’s being a bit more methodical, tapping into LTE-Advanced technologies to add capacity here and there. Consequently we’re not seeing a big jump in speeds from AT&T, but a gradual improvement across its 4G footprint. For instance, in the first half of 2014, Root found AT&T could boast an average of 20 Mbps in a single city. Six months later, that number was up to 15 markets.

AT&T's average speeds in major markets

AT&T’s average speeds in major markets

Root also found AT&T to have the far more reliable network with far fewer instances of call drops, call failures and lost data sessions than Sprint and T-Mobile. Ma Bell fell just Verizon in the overall RootScore rankings.

And where does [company]Sprint[/company] fit into all this? The answer is just barely. Root ranked Sprint No. 3 ahead of T-Mobile in overall RootScore, but despite all of Sprint’s talk about producing a barn-door-busting LTE network, its 4G service is still years behind the competition. The large majority of Sprint cities tested were averaging download speeds below 6 Mbps, and not a single market hit the 20 Mbps benchmark. One day Sprint’s Spark may truly become the mother of all networks, but that day is certainly not today.

Sprint's average speeds in major markets

Sprint’s average speeds in major markets

This post was updated on Wednesday to correct the number of markets in which T-Mobile achieved 10 Mbps or better average speeds from 108 to 96. The original figures Root supplied to Gigaom had an error, which the company has since corrected, but the change does not affect any of the other numbers or conclusions in the post.

Sprint is growing, but it’s still losing core phone customers

Marcelo Claure may have brought the struggling Sprint back to growth, but the new CEO probably wishes the company were growing in different ways. Sprint added 1 million new connections in the fourth quarter, but they were all prepaid, wholesale and tablet connections instead of core smartphone subscriptions.

In its Q4 earnings (the company’s fiscal Q3), Sprint revealed it lost 205,000 postpaid phone subscribers, the high-value customers who tend to be either on contract of premium service plans. While [company]Sprint[/company] total postpaid connections did grow by 30,000 last quarter, it was all tablets. Tablets are great, but a $30 tablet plan brings in half the revenue of a $60 smartphone plan. And as far as the slate race goes, [company]Verizon[/company] and [company]AT&T[/company] are clearly winning, connecting a combined 2.4 million tablets to their networks in Q4.

Unlike with tablets, there aren’t that many new phone customers out there. Carriers are basically poaching postpaid customers away from one another or upselling prepaid users on premium plans. So it’s pretty unreasonable to expect Sprint to post a quarter with a million new postpaid smartphone plans. But ever since Claure took over, Sprint has been focused on that segment, launching new promotions like its iPhone for Life leasing program and an offer to cut Verizon and AT&T phone bills in half.

Sprint said that due to those aggressive campaigns it had a record quarter of luring postpaid phone subscribers over to its network, but its competitors were also pretty successful at luring customers away from Sprint. Sprint’s churn rate, the percentage of customers that defect every quarter, for postpaid subscribers was 2.3 percent, double that of Verizon.

Sprint reported a loss of $2.38 billion last quarter, compared to a $1.04 billion loss a year earlier, but $1.9 billion was a one-time charge: Sprint wrote down the value of its brand. Sprint now has 55.9 million total customers.

During Sprint’s earnings call, Claure also gave an update on Sprint’s ongoing network upgrade. Sprint’s LTE network basically has three parts, each in a different phase of construction. Its main network on the PCS frequency band now covers 270 million people. Sprint has also been using its old Nextel airwaves to add LTE coverage to its footprint and that network is now in 60 percent of Sprint’s markets. Finally, the Spark network Sprint is building in the 2.5 GHz airwaves to add loads of capacity to the network now covers 125 million people.

Sprint launches a combined iPhone-iPad “For Life” deal

Sprint is getting creative with its “For Life” leasing programs, announcing Tuesday that it is creating a $100-a-month package that includes an iPhone 6, a 4G iPad Mini 3 and their service plans. That means unlimited talk, text and data on the iPhone and 2 GBs of monthly data on the iPad.

[company]Sprint[/company] launched its iPhone for Life program in September as an alternative to the two-year contracts and subsidized handset plan, which is gradually getting phased out in the U.S. mobile industry. Instead of owning their [company]Apple[/company] Phones outright, customers essentially lease them for two years, and the trade up their latest version of the iPhone at their end of their contract. It essentially functions like a smartphone upgrade program for customers who are willing to wait two years for a new smartphone.

The program proved popular, so Sprint extended For Life to Android smartphone and even tablets. This new bundle, however, not only puts your slate and phone lease on the same timeline, it also offers a further discount on Sprint’s regular For Life plans. Bought separately, a rented 16 GB iPhone 6 with unlimited plan would cost $70 a month, while a 16 GB iPad Mini 3 with a 2 GB data plan would run $47 a month. That’s a savings of $17 a month.

4G spectrum auction ends, raising a record $45B

It took a grueling two and half months, but the Federal Communications Commission auction of new 4G airwaves is finally over. The provisional winning bids totaled $44.9 billion for 65 MHz of airwaves, the most the FCC has ever raised at an auction, but we won’t know that actual winners for a few days when the commission releases the official results.

The contest came to a close Thursday morning at the end of 341st round when no new bids were submitted. As you might expect the heftiest prices accrued to the big cities: A single 20 MHz license in New York City metro region went for $2.8 billion, while the same license in Los Angeles went for $2.1 billion. Once you got past the third largest metro area, Chicago, winning bids fell under $1 billion. The cheapest license? That would be a 5 MHz block in the territory of American Somoa, which cost just $2,800.

Unlike previous auctions, which opened up new spectrum bands for 3G and 4G services, Auction 97 centered on a band already widely used for LTE: the Advanced Wireless Service (AWS) band. It’s where [company]T-Mobile[/company]’s main LTE network lies as well as the new LTE overlays built by [company]Verizon[/company] and [company]AT&T[/company]. All three of those carriers participated in the auction, as they can easily add capacity to their networks with these new licenses.

The big question mobile industry wonks are debating, though, is just how heavily [company]Dish Network[/company] bid in the auction. These AWS airwaves complement the satellite spectrum it recently repurposed for 4G use, but the wily satellite TV operator may have had other goals in the auction. Analysts have suggested that Dish might be driving up bid prices for its competitors or gathering a stockpile of spectrum it can use for future leverage over the carriers.

The auction more than quadupled the $10 billion reserve price the FCC set, producing far more interest than anyone in the industry predicted. There are a lot of different opinions on what the record-busting conclusion of the auction means, though. My colleague Jeff John Roberts recently pointed out it’s a victory for net neutrality, as the high prices paid show that the carriers were bluffing when they claimed that Obama’s net neutrality plan would stifle investment.

Gigaom contributor Peter Rysavy said that the participation in the auction shows that the “spectrum crisis” is very real. If carriers could add more capacity and speed to their networks through technology upgrades and more cell towers, then they wouldn’t be paying such ridiculous prices for new airwaves, he wrote in a recent Gigaom post.

The mobile industry’s lobbying group CTIA tends to agree with Rysavy’s conclusion. CTIA’s new President Meredith Atwell Baker issued this statement:

The AWS-3 auction is the highest-revenue generating auction in the 20 year history of FCC spectrum auctions, and with the last major auction six years ago, this reflects wireless companies’ demand for this finite resource to meet Americans’ growing mobile broadband usage. With nearly $45 billion in bids – and billions more in capex – this auction is yet another illustration of the significant economic impact that exclusive, licensed use spectrum provides taxpayers and the U.S. economy. ?

SK Telecom and Nokia make big cells and small cells play nice

SK Telecom has just incorporated a tongue-twister of a technology into its Nokia-built LTE network in Gwangju, South Korea. It’s called Enchanced Inter-Cell Interference Coordination, or eICIC for short, and its aim to make networks packed with all different sizes and shapes of cells work in harmony.

What [company]SK Telecom[/company] and [company]Nokia[/company] Networks claim to have done is produce the first commercial cellular heterogeneous network, or hetnet, in which a bunch of tiny little cells mounted on utility poles or on building walls transmit under the umbrella of a big tower-mounted macro-cell. Normally in that type of situation you’d get a murky soup of cross-interference, as the big cell’s signals would overwhelm the signals of the smaller cells or vice versa.

With eICIC, though, the network can coordinate how and when those cells transmit in order to prevent much of that interference from occurring. eICIC is a key component of that grab bag of technologies we’ve come to know as LTE-Advanced and it will be critical in building super-dense networks of the future with loads of broadband capacity.

A diagram from Qualcomm showing small cells under the umbrella of a macro-cell

A diagram from Qualcomm showing small cells under the umbrella of a macro-cell

SK has actually been tinkering with the technology for some time – I first spoke to the carrier’s engineers about their lab eICIC lab test back in 2011 – but it’s proven a very difficult LTE-Advanced technology to master. Interference has always been the bane of RF engineers’ existence because the more transmission points you put in the network, the more places you create overlap between those transmissions. And everywhere you get that overlap you get interference, bad signals and crappy data connections.

Instead of trying to avoid that overlap, the hetnet takes the problem head on, depending on technologies like eICIC to get them out of its interference bind. SK says it’s now ready to start spreading its hetnet across South Korea with the help of eICIC. Hopefully that means the rest of the mobile industry is ready to follow in its footsteps. If carriers can eliminate – or at least mitigate – the interference problem of small cells, we could start seeing networks that don’t get overloaded in crowded places and pack tremendous amounts of capacity.

TracFone fined $40M for selling unlimited plans with clear limits

The Federal Trade Commission is putting mobile carriers on notice that if they advertise an unlimited plan they can’t monkey around with speeds — or at least must clearly disclose their throttling practices up front. After suing AT&T in October, the FTC has now come down on TracFone, the country’s largest virtual mobile operator, fining it $40 million.

TracFone is owned by Mexico-based multinational carrier [company]América Móvil[/company], and it operates as a mobile virtual network operator that buys minutes, texts and megabytes wholesale from the big four U.S. carriers. TracFone then resells those services under several names, including Straight Talk, Simple Mobile, Net 10 and Telcel America. Many of those brands have offered considerable deals to consumers, such as Straight Talk’s $45 plan, which offers unlimited voice and text along with what it claims is unlimited data. The problem was the company hasn’t exactly been upfront with its customers about the clear limits in those so-called unlimited plans.

For instance, in 2012 Straight Talk advertised unlimited data with no caveat when in reality it started warning and then cutting users off if they went over a 2 GB limit. Later it started slowing down the speeds of users after they crossed certain thresholds (in 2014, TracFone claimed throttling didn’t kick in until about 3 GBs), but it was still calling its data service unlimited As the FTC pointed out, it wasn’t exactly upfront with customers that their speeds could capped.

Though the FTC reached a settlement with TracFone, it apparently isn’t making it dump its use of the term “unlimited” in its advertising. Instead TracFone “must clearly and conspicuously disclose any limits on the speed or quantity of its data service.”

Customers who have been throttled under one of TracFone’s plans though are eligible for a refund. You can visit the FTC’s website to file a claim.

T-Mobile Super Bowl ad entreats us to “Save The Data”

T-Mobile is using a Super Bowl ad to push its new Data Stash program, which lets users rollover unused megabytes from month to month, and last night it gave a sneak peak of the 30-second spot on YouTube.

[youtube https://www.youtube.com/watch?v=ZTwzsV3I3OQ&w=560&h=315]

The tongue-in-cheek commercial plays on the the public service announcement, with Kim Kardashian West alerting viewers that “each month millions of unused gigs are taken back by wireless carriers.” All of that unused data could have been put to use viewing selfies of Kim Kardashian West, she said.

Many of the mobile carriers use the Super Bowl as a way to show off new ad campaigns, so [company]T-Mobile[/company]’s may not be the only new mobile commercial we see. We might even seen competing ads for rollover data programs. [company]AT&T[/company] launched its own data banking program this week to compete with Data Stash.

AT&T to buy Nextel Mexico, continuing continental expansion

AT&T’s plans to tackle the Mexico market aren’t just limited to buying a single mobile operator Iusacell. It announced Monday it is buying Iusacell’s competitor Nextel Mexico for $1.875 billion from NII Holdings and will merge its operations into its growing pan-American network.

[company]AT&T[/company] closed its $2.5B deal for Iusacell earlier this month, making it the third largest mobile carrier in Mexico. Adding Nextel’s 3 million subscribers will give AT&T about 12.2 million customers in Mexico, but it will remain a distant third place to Mexican giant [company]América Móvil[/company].

Nextel Mexico is one of the many companies to carry the Nextel brand throughout North and South America. The most famous version Nextel Communications was acquired by Sprint a decade ago, and its brand was only recently retired. But several other Nextel’s continued operating in different countries under the [company]NII Holdings[/company] umbrella. NII filed for bankruptcy last year, so the AT&T offer has to go through the bankruptcy court. That means it could trigger a potential auction for Nextel Mexico’s assets.

Like the other Nextels, Nextel Mexico runs iDEN Networks, which were once celebrated for their walkie-talkie-like push-to-talk capabilities but fell out of use during the mobile data revolution. Nextel Mexico, however, has since launched a 3G network based on HSPA technology that lines up with AT&T’s technology. It’s also launched LTE in three major cities: Mexico City, Guadalajara and Monterrey.

In mobile, postpaid connections rise while prepaid declines

Over the last year, postpaid mobile subscriptions have been booming, while prepaid — once the strongest area of mobile growth in the U.S. — has been slowly dropping off, according to communications market researcher ShareTracker.

According to ShareTracker, postpaid net additions among the mobile carriers has increased 156 percent between 2013 and 2014. Postpaid used to mean contracts, but today it’s any manner of plan where you pay after your billing cycle. Meanwhile prepaid — service where you buy voice, SMS and data ahead of time  — saw an average decline of 35 percent, ShareTracker found.

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As you might expect, prepaid and postpaid tend to track the U.S. economy. During the recession, prepaid growth jumped dramatically, but now that the economy has recovered, postpaid is returning to growth.

T-Mobile offers customers with bad credit its top phone deals

On Sunday, T-Mobile is unveiling a program that will essentially let customers with bad credit scores to prove their worthiness to the carrier and thus qualify for financing deals that would put the newest and most expensive smartphones in their palms.

Today at [company]T-Mobile[/company], the latest and greatest smartphones aren’t available to customers. Technically anyone can buy a new iPhone 6+ or the newest Samsung Galaxy if they’re willing to pay the full cost of the device, but if you wanted to spread the cost of a $750 smartphone over two years then you need good credit — carriers call that “well qualified” — to qualify for T-Mo’s financing program.

Under the new program called Smartphone Equality, any customer on a voice prepaid or postpaid voice plan that maintains their service or pays their bill on time for 12 straight months will become eligible for all of T-Mobile’s smartphone financing deals. So even if you’re on the most basic feature phone plan, if you make 12 months worth of payments on time, you can immediately upgrade to, say, the iPhone 6+ for $0 down and monthly payments of $27.08 for two years. You can even use the program to finance a tablet.

The program is also retroactive, so if you’re already a T-Mobile customer with a year of on-time payments behind you, you’ll immediately be eligible for the program Sunday. In an interview, T-Mobile VP of customer loyalty Matt Staneff also pointed out that you don’t lose your Smartphone Equality status, so if you finance that iPhone 6 and are late on a payment two months later, T-Mobile won’t suddenly insist you pay the full cost of the device.

About 63 percent of American consumers do not have the highest credit score, which is generally the bar that T-Mobile and other carriers have applied to their most compelling offers, Staneff said, though he didn’t reveal what T-Mobile’s specific credit policies were. Smartphone Equality basically lets T-Mobile make its own internal judgments on a customer’s credit worthiness rather depend on outside reports, Staneff said.

“I wouldn’t call it a credit program,” Staneff said. “I’d say we’re building trust together with our customers.”

Though this program will qualify a lot of postpaid customers for financed smartphones they wouldn’t normally be eligible for, Staneff said he anticipates it will move a significant amount of prepaid customers into the postpaid category. While many customers prefer prepaid, he said, there are a lot who were forced into a prepaid plan because of bad credit or they refused a credit check. “This is a very simply to way to get them the product they want,” Staneff said.