The T-Mobile/Cingular Joint Venture NYC/CA/NV

This is an effort to help some people understand how the Cingular/T-Mobile NYC/CA/NV Network Sharing agreement works.

First, you must understand that Cingular and T-Mobile network sharing agreement is only effective in the NYC metro market, including north NJ, Long Island in the east coast and in California/Nevada markets in the west coast. Second, let's clarify that they certainly don't roam on each other or lease anything from each other in these areas. This is a Network Sharing agreement, which is a different concept that has never been done in the US before. That's why so many people are confused with this.

T-Mobile and Cingular decided to create a subsidiary called "GSM Facilities" or "GSM Factory". T-Mobile calls is one way, Cingular calls it the other way, but it is the same entity. This entity or subsidiary is in charge of maintaining and operating the GSM networks in NYC/CA/NV on behalf of Cingular and T-Mobile. So neither company interacts with the networks directly without going through GSM Facilities first. GSM Facilities is funded money from both T-Mobile and Cingular based on the minutes used by each carrier. If T-Mobile uses the network more than Cingular, then they have to pay more money to GSM Facilities.

The cell base stations/antennae used by these GSM networks are directly owned by GSM Facilities which as I said before is co-owned by both T-Mobile and Cingular as if two people were owners of the same house. The spectrum blocks used by these towers is also shared. T-Mobile uses the A and D 1900Mhz blocks in NYC and so does Cingular because they share the same channels. In CA, Cingular uses the B and F channels and so does T-Mobile. In reality, sometimes a T-Mobile user can be using a particular channel, and then later on, a Cingular user may be on that same channel. Besides all that, under the hood, calls on Cingular and T-Mobile are routed through separate switches because they have separate network switches located in different centers. The towers communicate with both Cingular and T-Mobile switches since they are separate. That's why Cingular gives out area codes and exchanges different than those from T-Mobile to their customers. Billing, of course is done separately.

If the agreement is broken, both companies will be returned their original assets. T-Mobile in NYC/NJ and Cingular in CA/NV. The official agreement statement says that if any party were to decide to end the network sharing agreement, they will be allowed enough time to build infrastructure in the market where they originally did not have a network. Therefore, there's no chance T-Mobile will have to exit the CA/NV markets if the agreement is ever broken.

Here's the difference between Roaming and Network Sharing:
1) Roaming is when there is no native presence of your carrier in a market or geographical area and they use another carrier's network to provide coverage. In this case, your carrier is not allowed to sell service in that area because they don't have a license for that area. Therefore, you cannot get an area code and exchange number that belongs to that area. Also, not all network services are guaranteed such as GPRS, SMS, Caller ID, etc.

2) Network sharing is when two carriers have a joint agreement to provide NATIVE SERVICE using the same base stations and towers. However, each carrier has licenses to sell service in that area and therefore you are able to get an area code and exchange belonging to that area. The area codes and/or exchanges offered are not the same for the other carrier sharing the network. All networks services are guaranteed to work in this area such as SMS, Caller ID, GPRS, etc.

Also, when some of people claim T-Mobile is better than Cingular in NYC, they are not talking about coverage problems. They are talking about CAPACITY problems. T-Mobile has more calling capacity on its network than Cingular in NYC, and although the signal strength is the same (because they use the same towers), the ability for the call to go through is better on T-Mobile because they have more switch capacity than Cingular. This has nothing to do with adding more towers. It is exclusively internal. Also, this has nothing to do with priority. There is no such thing as T-Mobile having more priority than Cingular to use the towers. Both carriers have equal access to the towers and spectrum. They don't discriminate on who gets to use the towers first or who gets more tower spectrum since both carriers equally share the entire spectrum blocks they have licensed. It is all about Cingular's lack of call switching capacity which is INDEPENDENT of the towers, spectrum, or channels available. This situation, however, has been greatly alleviated by the installation of more trunk lines in Cingular's back end.

Finally, there is no such thing as towers used exclusively by one of the two carriers sharing the network. Any tower that goes up is connected to the same network and therefore it will benefit BOTH carriers equally.

And one last thing....with the Cingular/AT&T acquisition agreement there are many rumors circulating about how it will affect Cingular's relationship with T-Mobile. Well, on May 25th, Cingular and T-Mobile announced they will be unwinding their joint venture after the AT&T Wireless acquisition. In other words, they will be filing for divorce . This transaction is expected to be completed by February 2005 and it is dependent on the acquisition of AT&T Wireless. In other words, if for some reason Cingular cannot complete the acquisition of AT&T Wireless, then T-Mobile and Cingular will continue their joint venture unchanged. As part of the joint venture unwinding, Cingular will receive 10Mhz from T-Mobile in the NYC market and T-Mobile will receive 10Mhz in the CA/NV markets. In addition, T-Mobile will be buying 10Mhz more from Cingular in certain markets in the west coast for a total of 20Mhz. Also, T-Mobile has the option for a period of two years following the unwinding to buy an additional 10Mhz from Cingular if they wish in some west coast markets. Lastly, Cingular will be leasing spectrum capacity from T-Mobile for up to 4 more years in all the joint venture areas (NYC/CA/NV) while Cingular moves all its customers to the soon to be acquired AT&T Wireless network. The general consensus is that this means Cingular customers will be roaming on T-Mobile's networks in these areas while AT&T Wireless networks will be used as home networks. However, the FCC filings explain that this is not the case. In other words, it appears that Cingular will only be borrowing spectrum capacity from T-Mobile for up to four years instead of open roaming. AT&T Wireless did a similar transaction with Sprint PCS not long ago where AT&T Wireless leased 10Mhz of spectrum from Sprint PCS to alleviate some capacity issues AT&T Wireless was having in NYC while they upgraded to GSM.

I hope this clears up some doubts.