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MetroPCS launches first 4G LTE market and phone

The prepaid phone provider launches country's first phone on the next-gen wireless network. But the Samsung Craft, for now, only works in Las Vegas.

MetroPCS launched the nation's first Long Term Evolution 4G wireless broadband network today in Las Vegas along with the first-ever commercial LTE handset.

Like all MetroPCS services, the new 4G wireless broadband service is prepaid and it doesn't require a contract. For $55 a month, users get unlimited talk, text, and data. And for an additional $5 a month, they also get 18 channels of streaming video.

Samsung Craft, the first commercial 4G LTE handset MetroPCS

The prepaid wireless operator is launching the new service with the first LTE handset: the Samsung Craft.

But before you get too excited, there are some important caveats. For now, the service is only available in parts of Las Vegas. Eventually, MetroPCS will expand the service to its other markets. By 2011, the company expects to cover 19 markets with the LTE service, according to Tom Keys, MetroPCS chief operating officer.

MetroPCS does not support 3G technology for data on the rest of its network. Instead, it offers a 2.5G data implementation. So the move to 4G was a way to leapfrog the 3G data technology and move right toward faster-speed wireless broadband. What this means for consumers who sign up for the service is that when you are not in 4G wireless territory, the network that you end up using is really a 2.5G network instead of a speedier 3G network.

This is different from other 4G wireless services from Sprint Nextel, which uses Clearwire's 4G network and its own 3G network when 4G is unavailable. And it will be an important distinction when Verizon Wireless and AT&T launch their 4G wireless services. Verizon plans to launch a 4G wireless network based on LTE later this year. AT&T has said it will launch its network by the middle of next year. Sprint and Clearwire are using a 4G technology known as WiMax, but the speeds of WiMax and LTE are comparable.

Another important distinction between the MetroPCS service and the other 4G services that have launched or will launch soon, is the device. MetroPCS is launching the service with the Samsung Craft, a souped-up feature phone that uses a proprietary Samsung operating system and home-grown Samsung chips.

The device, which costs $349 and comes with a $50 rebate, is no Android-based HTC Evo, which is the handset used on Sprint's 4G network. That said, the phone does come with a full Web browser, a QWERTY-keyboard, Wi-Fi connectivity, and a touch screen.

Keys said that the company is not trying to compete directly with the major carriers. Instead, the company is simply offering speedier wireless data service for its 7.6 million customers.

"We're not trying to offer something to compete with the iPhone," he said. "We did this for our customers, which wanted more wireless data. "

Some 90 percent of the company's customer base uses wireless data services today, Keys said, and half of them use their mobile phones as their primary means to connect to the Internet.

The Samsung device that MetroPCS is using to launch the service was not designed for dozens of apps. And unlike the Sprint's HTC Evo, it doesn't turn into a Wi-Fi hot spot. Instead, the Samsung Craft was designed as an entertainment device providing speedy connectivity to the Web and access to streaming video and music, Keys added.

It's clear that MetroPCS's LTE roll out will be small compared to what Verizon Wireless has planned. MetroPCS plans to be in 19 markets by the end of 2011, covering about 110 million people. By contrast, Verizon has said it will be in 25 to 30 markets by the end of this year. And it expects its service to be available to 100 million people this year alone. It will continue rolling out the 4G service over the next year.

So far there is no word on what kind of device with which Verizon will launch its LTE network. Traditionally, wireless operators have launched faster networks with wireless data cards and dongles that allow laptops to connect to the faster networks. Chipsets designed for phones are typically available in high-volume a year after chips used in data cards are available.

But there is a chance that this time line has been sped up to accommodate Verizon's launch. While some people believe that Verizon could launch its service with a 4G LTE handset, chip experts say that the chips will be early implementations, and devices may not be optimized for the 4G network. This means that the handsets will likely consume lots of power and may have other issues. In other words, these devices will work, but it may not be pretty.

So far, Sprint Nextel is the only wireless operator to introduce 4G wireless phones, which use WiMax instead of LTE. The HTC Evo was the first 4G phone to hit the market. Initially, this device had power consumption issues. Iyad Tarazi, vice president of network development and engineering for Sprint, admitted this was an issue early on. But he said the company has optimized how the device connects to the 4G network, which has alleviated the power concerns.

For now, MetroPCS is only offering the one Samsung device, no 4G data sticks for laptops or dongles. That said, Keys expects the company to add other 4G devices to its lineup later, including tablets.