In an effort to expand its LTE network, T-Mobile US, Inc. (TMUS) – the fourth largest wireless carrier in the U.S. – has decided to experiment with a new technology platform, which will have both licensed and unlicensed spectrum. This novel technology, called Licence Assisted Access (LAA), will provide consumers with faster speed.
LAA is an LTE innovative technology which will use unlicensed 5GHz spectrum bands. This technology will provide faster speed along with excellent coverage. LAA has been developed by Ericsson. Ericsson will provide small cells which will be based on LAA technology, starting from fourth-quarter 2015.
T-Mobile is planning to test this innovative technology in 2015. In order to produce compatible devices for this test, the company has teamed up with radio, chipset and device partners. We believe this new technology will not only help T-Mobile to increase its customer base but will also reduce churn rate on the back of better service.
Additionally, T-Mobile has started deploying LTE network on its 700 MHz spectrum holdings to enhance its service quality outside major urban areas. Earlier, data packet drop was a serious concern in these areas.
At present, the company offers LTE in 26 major U.S. markets and covers 260 points-of-presence (POPs) with LTE network. This exceeds the company’s own expectations of covering 250 million POPs by the end of 2014. Management is hopeful of covering over 300 POPs with LTE service by the end of 2015.
T-Mobile currently has a Zacks Rank #3 (Hold).
Other Stocks to Consider
Some better-ranked stocks worth considering in this sector are Aruba Networks, Inc. (ARUN), InterDigital, Inc. (IDCC) and ViaSat Inc. (VSAT). All these stocks sport a Zacks Rank #1 (Strong Buy).
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