Studies show Sprint and T-Mobile need to expand U.S. coverage

Maybe a merger of the 3rd and 4th largest U.S. carriers makes sense?

Two major studies released this week of the nation's largest wireless networks put Verizon Wireless on top in nearly every technical network measurement, with AT&T close behind and Sprint and T-Mobile trailing.

The studies by JDPower and RootMetrics point to the nationwide wireless dominance of Verizon and AT&T, which serve a combined two-thirds of all subscribers.

The two studies might arguably give federal regulators a technology rationale to allow Sprint, the third-largest U.S. wireless carrier, to merge with fourth-place T-Mobile, as Sprint's parent company SoftBank of Japan clearly desires.

A profile of SoftBank Chief Executive Masayoshi Son in the Wall Street Journal reports that he is working on a bid for T-Mobile despite strong opposition by U.S. antitrust officials, who are concerned with reduced competition. It was the Justice Department that rejected AT&T's offer to buy T-Mobile in late 2012.

The question regulators might want to weigh is whether combining T-Mobile and Sprint would enhance wireless network coverage of the combined entity -- not just in the months after the two would merge, but in a few years, if that new entity could grow profitable and use cash to buy up new spectrum. Today, both companies have customers in many of the same cities and need to reach beyond their existing footprint, which more spectrum could make possible. Two spectrum auctions are scheduled in the next two years, one in September for what's called high-frequency AWS-3, and another later on for low-frequency 600 MHz currently allocated for broadcast TV.

The timing might not be right for T-Mobile and Sprint. It could take months to win what would likely be a protracted merger review from federal officials and then still bid in those two auctions. However, additional spectrum outside of major cities is where Sprint and T-Mobile need improvement, which is borne out by the JD Power and RootMetrics results.

As good as T-Mobile has been in attracting customers with no contract plans amid the attention-getting tweets and press conference remarks of its CEO John Legere, it has a similar problem faced by Sprint: Namely, it is hard to travel nationwide and get consistent network performance over either T-Mobile or Sprint. Sometimes it is hard to get consistent performance from either carrier when traveling from a city center to the suburbs or inside of large steel buildings.

JD Power and RootMetrics both pointed to a strong broad, nationwide network by Verizon, with AT&T in second and Sprint and T-Mobile both trailing.

In the JD Power study, based on a survey of 25,142 wireless customers from July to December 2013, Verizon held the top ranking in all six regions nationally with AT&T consistently in second place, and with T-Mobile in third place in four of six regions and Sprint in third place in two of the six regions. The regions were Northeast, Mid-Atlantic, Southeast, North Central, Southwest and West.

JD Power asked customers about network performance for voice calls, text messaging and data. Overall network performance was based on 10 problem areas that affect a customer's experience: dropped calls; calls not connected; audio issues; failed/late voicemails; lost calls; text transmission failures; late text message notifications; Web connection errors; slow downloads and email connection errors.

Network performance was measured in problems per 100 network connections, and a lower score reflected fewer problems and better network performance.

The RootMetrics data goes much further in depth and geography, looking at the national capability of networks by the four largest providers as well as their ability at the state level and in 125 metropolitan areas. RootMetrics said it collected 4.6 million data points about network performance during 218,000 miles of driving tests through all 50 states during the last six months of 2013. Testing was also done in 6,300 indoor locations.

For national results, Verizon finished with the top RootMetrics score for network reliability in five of six categories, with AT&T beating out Verizon for the nation's fastest network. Verizon won for overall network performance, network reliability, and for call, data and text performance.

In its report, RootMetrics noted that both Verizon and AT&T at the national level are "head and shoulders above the other networks" with a "large gap" between Verizon and AT&T and Sprint and T-Mobile. On a 100-point overall scale, fewer than 4 points separated Verizon (89.7) and AT&T (86.2) overall, while there was a large gap to the others: Sprint (68.2) finished third and T-Mobile (64.3) finished fourth.

"If you travel throughout the country or are looking for a network that excelled at our broadest-level testing, Verizon or AT&T remain your best options," RootMetrics said.

At the state level, Verizon finished in first place in 46 of 50 states for network reliability in the RootMetrics study, while AT&T won or tied for first in 16 states. Sprint and T-Mobile never took first place in overall performance or network speed in any of the states.

At the metro level in 125 locations, AT&T "clearly outperformed Verizon," RootMetrics said. Especially with network speed, AT&T won or tied in 92 markets, while Verizon won or tied in 26 markets. Even so, Verizon was the most reliable in the metro findings. Meanwhile, T-Mobile had the top speed result in 20 markets, but Sprint never finished first in speed.

RootMetrics commented that T-Mobile's performance "points to a significant dichotomy. While the 'uncarrier' is starting to offer some truly noteworthy speeds at the metro level, its performance drops dramatically at the broad state and national levels. If you are in an urban environment, T-Mobile could be worth a look, but outside of metros, the story is different."

After the two studies were released, Verizon crowed in a blog that it offers wireless network coverage "where and when customers want it."

At T-Mobile, CEO Legere tweeted Wednesday that the carrier uses "real results from real people when we make network claims," an apparent comment on RootMetrics' use of workers driving in cars to conduct its network tests. Last year, T-Mobile urged its customers to do their own network tests by using a special CoverMap app. Legere has used results from those customers to make some of his claims about T-Mobile's performance.

To its credit, T-Mobile understands the need to grab a larger U.S. footprint, and purchased 700 MHz spectrum from Verizon in January that covers portions of the Northeast, Florida, Texas, Michigan, Ohio, Minnesota and California. Referring to T-Mobile's emerging network footprint, Legere also tweeted: "Congrats to our competitors -- you guys really knocked it out of the park on that [RootMetrics] report, LAST year when the tests were done."

It's safe to say that both the JD Power and RootMetrics findings point to a need for a possible combined Sprint-T-Mobile to expand beyond network coverage in cities and to even improve inside cities, in the case of Sprint.

For federal policy makers, the question becomes whether it is better to let Sprint and T-Mobile continue on their separate paths and try to expand spectrum and geographic footprints -- and possibly network performance -- alone or to work together to grow and buy more spectrum to offer greater national coverage. The key word there is "possibly."

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed. His email address is mhamblen@computerworld.com.

See more by Matt Hamblen on Computerworld.com.

Read more about wireless carriers in Computerworld's Wireless Carriers Topic Center.

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