MetroPCS Communications, a regional cell phone company that mainly caters to low-income customers, on Tuesday became the first U.S. carrier to use a new network technology that provides faster data access and is expected to become the industry standard.
MetroPCS, which has 7.6 million subscribers, turned on Long Term Evolution, or LTE, service in Las Vegas. It's ahead of Verizon Wireless, which has 92 million subscribers and plans to bring LTE to 25 to 30 cities later this year.
MetroPCS CEO Roger Linquist said the company aims to turn on LTE across its entire network, which is concentrated in cities, by January.
To take advantage of the network, Dallas-based MetroPCS is selling the first U.S. LTE phone, the Samsung Craft, for $299. It's not a smart phone with an array of downloadable applications, but it does have a touch screen and a keyboard. It can surf the Web and access Facebook, Twitter and other popular services. Smart phones that will benefit more tangibly from the data speeds provided by LTE will come next year, Linquist said.
MetroPCS service is prepaid and doesn't come with a contract. Many customers pay for it in cash at MetroPCS stores. Linquist said that phones are the main way their customers access the Internet.
MetroPCS is charging $55 per month for unlimited calling and texting on LTE, with all taxes and fees included. That's $5 more than it charges for smart phones. For an extra $5 per month, MetroPCS provides video on demand from RealNetworks Inc. that includes TV shows from NBC Universal, Black Entertainment Television and Univision.
LTE is a so-called fourth-generation, or 4G, wireless technology. MetroPCS isn't saying what speeds individual users might get, but Linquist said that in Las Vegas, people connecting to the same cell tower will share about 6 to 8 megabits per second of capacity, about the speed of a cable modem.
Samsung provided the network equipment as well as the first phone for Las Vegas, but LM Ericsson AB of Sweden is the main vendor of network equipment for the wider build-out.
So why is a relatively small, frugal player like MetroPCS the first out of the gate with what looks like the future of wireless? Linquist said vendors want to be out front on LTE, and were eager to work with the company and give it good deals. Also, the technology can potentially save MetroPCS a lot of money by reducing the amount of equipment required to keep the network running.
"It's all about cost for us," Linquist said.
Sprint Nextel is building a 4G network using a different technology, known as WiMax, through its Clearwire Corp. subsidiary. It launched the first phone for that network this summer.
Neither MetroPCS or Sprint uses 4G for calls. That part of the technology has not been worked out yet, so the phones use regular 3G as a backup.