Thursday, November 22, 2012

T-Mobile unwilling to mortgage the future for an iPhone: COO

Although T-Mobile has made changes to its network to allow unlocked iPhones to receive HSPA+ service in 15 markets, the company doesn't want to mortgage its future to gain access Apple's smartphone. T-Mobile is the only member of the Big Four wireless carriers that doesn't carry the iPhone.

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T-Mobile also has to look enviously at regional carriers like C-Spire, that carry the iPhone. Despite this, though, on Monday, Jim Alling, COO of T-Mobile USA, made it quite clear the company is not going to make major sacrifices to get the iPhone.

Speaking at the Morgan Stanley 12th Annual Technology, Media & Telecoms Conference in Barcelona, Spain, Alling said, "Make no mistake about it: We would love to carry the iPhone. However, we want the economies to be right for us."

Specifically, Alling said T-Mobile USA does not want to sign a deal "similar to one a competitor recently signed with Apple." He did not detail which carrier he was speaking of, but we'd guess that was a reference to Sprint, which began carrying the iPhone in late 2011 under a deal that some have said was Apple extracting its pound of flesh (or at least, a ton of money).

Sprint's four-year, $15.5 billion deal with Apple has substantially driven up Sprint's device subsidy cost. Sprint has even said that the iPhone portion of its business will not turn a profit until 2015.

However, there are other reasons to have the iPhone. Included in that is reduced churn, something that T-Mobile USA is seeing -- meaning a lot of users leaving the company -- and higher average return per user.

Alling did acknowledge that not carrying the iPhone has been resulted in subscriber defections, saying "We recognize that it has been a point of churn for us."

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That said, there are currently some 1.5 million unlocked iPhones on T-Mobile's network. That's despite the fact that outside of the 15 markets mentioned above, these device are stuck on super-slow EDGE, at least until T-Mobile modifies more of of its network to offer 1900 MHz HSPA+. These users have been attracted by T-Mobile's SIM-only Value Plans.

T-Mobile USA and the recently acquired Metro PCS hope to complete their merger early next year, and the company feels completion of the deal can not only add efficiency synergies, it can also put the company in a growth position.

In addition, T-Mobile is still on track to launch LTE in the second half of 2013 and expects to cover 200 million people with the 4G technology by year-end 2013.

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