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T-Mobile to Upgrade Network to 4G

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T-Mobile US, Inc. (TMUS - Free Report) in its first anniversary of LTE launch has reportedly announced a work upgrade program which would involve upgrading its entire2G/EDGE networkinto 4G.

The company’s 4G LTE is currently serving 210 million people in 273 metro areas in the U.S. It expects 50% of its network upgrade program to be covered in 2014. It is also hunting for new 700 MHz A-Block spectrum for deploying 4G LTE this year. T-Mobile expects its entire network to run on LTE platform by mid-2015.

Unprecedented growth in high-speed mobile Internet traffic, in particular for wireless data and video, has transformed the telecommunications industry into the most evolving, inventive, and keenly contested space. In addition, the emergence of wireless broadband technology has created several new service areas, which offer huge growth potential. As a result, it remains imperative for carriers like T-Mobile to build in their network capabilities to attract more customers. 

We believe that transformation into LTE network will boost T-Mobile’s growth in the telecom industry. The current scenario in the wireless industry is more skewed toward data and video services than voice. Any new network standard aims at faster data connectivity, quick video streaming with high resolution and rich multimedia applications.

Further, massive growth in mobile data usage is also giving rise to new network technologies to provide seamless service. Smartphone and tablet users are progressively uploading video content which is driving more revenue per unit for telecom operators.

So to stay competitive among notable players like AT&T Inc. (T - Free Report) , Verizon Communications Inc. (VZ - Free Report) and Sprint Corp. (S - Free Report) it is important for the company to upgrade its infrastructure according the current demand trend.

However, the company would also need to increase spending on capital expenditures in order to update its networks with the latest technologies. According to reports, in 2013, telecom carriers’ expenditures rose 6% year over year and are expected to rise at a CAGR of 2% from 2012 to 2017, totaling a significant $355 billion by that time.

T-Mobile US currently has a Zacks Rank #3 (Hold).

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