T-Mobile bets the iPhone will curb subscriber churn

By , Dec 9, 2012

As you know, T-Mobile USA, the nation’s fourth-largest carrier, will finally land Apple’s iPhone next year. The Deutsche Telekom-owned telco is making no excuse for its failure to land the sough-after device earlier and, unsurprisingly, is looking to tap the popularity of the Apple smartphone to win back some of its subscribers lost to rivals AT&T, Verizon Wireless and Sprint.

T-Mobile USA CEO John Legere told reporters on Friday that his company, which has 33 million customers in the United States, is hoping to steal would-be subscribers who are eyeing an iPhone on a rival network. Even more so, the German company acknowledges that having the iPhone is key to returning to growth in subscriptions by the end of 2013…

“It is an aggressive target but we think it is possible”, Legere said Friday, according to Reuters.

The CEO previously acknowledged how lack of the iPhone hurt its business:

A certain number of customers wouldn’t come to the store if we didn’t have the iPhone. We worked very, very hard for a deal that made sense for us.

Look no further than the September quarter, when nearly half a million subscribers fled T-Mobile’s network in order to get their hands on an iPhone.

Rate of branded net contract customer losses increased year-on-year to 389,000 contracts in the third quarter of 2012 “due to the impact of the iPhone5 launch”, the wireless company acknowledged.

“We recognize that it has been a point of churn for us”, COO Jim Alling said last month while arguing the iPhone was too costly a deal for his company.

What a difference a few weeks make…

Earlier this week, T-Mobile confirmed it has struck an interesting agreement where it will start selling some wireless Apple products in 2013.

“T-Mobile USA has entered into an agreement with Apple to bring products to market together next year”,  parent Deutsche Telekom wrote in Thursday’s media release, telling The Loop that “additional details will be made available at a later date”.

The carrier plans to sell the iPhone and other smartphones in a different way, by eliminating handset subsidies by the end of the year.


Unlimited T-Mobile plans for subsidized devices start at $30 a month.

So, instead of paying a subsidized $199 iPhone, customers would pay for the full price of the device upfront and sign up for one of the unsubsidized Value Plans that offer significantly cheaper monthly rates for voice and, particularly, data services.

Here’s from Carly.

In case you were wondering, T-Mobile USA offers free support to unlockers and sells Nano SIMs. It’s in the process of rolling out the iPhone-friendly network on the 1900MHz band, which allows the 1.5 million unlocked iPhones hosted on its US network to finally surf the web at 3G HSPA+ speeds.

With a little help from the spectrum it acquired from AT&T, the carrier is moving to the iPhone-friendly 1900MHz frequency because it plans to use the current 3G HSPA+ service on the 1700/2100MHz bands for the deployment of LTE next year.

The company confirmed it’s on track to launch LTE in the second half of 2013 and cover 200 million people in the US with LTE by year-end 2013. Thanks to the spectrum gained through the MetroPCS merger, T-Mobile should as well be able to expand LTE service to 20×20 MHz “in many markets”.

Here’s more from Carly.

By the way, when T-Mobile says “4G”, they really mean 3G HSPA+ and not 4G LTE.

I know, it’s confusing as hell – talk to your senator.

Now, because the iPhone and other unlocked AT&T phones use the 1900MHz band for 3G data, T-Mobile users with unlocked iPhones who live in the areas where HSPA+ 1900MHz is available can expect to experience data speeds topping a theoretical maximum of 42 Mbps. It’s worth noting that the iPhone 5 supports the latest DC-HSPA+ technology that T-Mobile is using.

For reference, AT&T only supports HSPA+ 14.4 Mbps. According to T-Mobile’s internal tests, an unlocked iPhone 4S running over its 1900MHz HSPA+ network recorded on average 70 faster faster download speeds than iPhone 4S devices on AT&T’s network.

T-Mobile’s iPhone-friendly 1900MHz HSPA+ service is now available in five major areas: Las Vegas and Kansas City, in addition to Washington D.C., Baltimore and Houston markets.

Consumer Reports, an influential US magazine that’s been testing all kinds of products and services since 1936, ranks T-Mobile #3 in terms of  voice and data service quality, ahead of #4 AT&T and behind Verizon and Sprint.

Perhaps unsurprisingly, neither T-Mobile nor any other major carrier topped regional wireless providers in terms of customer satisfaction.

For example, U.S. Cellular in a survey conducted by Consumer Reports had an overall customer satisfaction score of 88 percent, while AT&T, Verizon, Sprint or T-Mobile individually didn’t go past a score of 72 percent.

  • Share:
  • Follow:
  • http://www.facebook.com/joe.jonsen Joe Jonsen

    yeah it will help them until they greedily strart raising rates and lowering service quality

    • Falk M.

      I think they know their place in the market for a couple of years to come and I’m sure they don’t want a nose dive too soon again.

  • http://www.facebook.com/CMak70 Chris McOmber

    They better start refarming that 3G network fast because seeing an “E” where 3G is supposed to be (in most areas) is going to piss some people off real fast. I am stoked for T-Mobile customers, they deserve the iPhone like everyone else. Welcome home!

  • http://twitter.com/mhobb91 mhobb

    Just wishing i didn’t have to pay full price to get the iPhone.

  • macboy74

    This is great for their customers. Because now they can have fake 4g aka HSPA+ on the iphones.

    • MagicDrumSticks

      That may be true but their HSPA+ is almost as fast as the other LTE networks and I’ve seen speeds of 30mbps in some places

      • macboy74

        No doubt it man. I have four family members who have tmobile and they get 6-8 tops. I get 32-52 on AT&T’s LTE. AND 22-30 on my Verizon SGSIII.

  • robzga

    The iphone coming to tmobile is great but paying the full price is crazy not everyone can afford that upfront I think tmobile should rethink that part, if they realy wanna bring back the customers or atleast hav some customers buy the phone, they should work on that part a little more.

    • http://www.facebook.com/CMak70 Chris McOmber

      100% agreed.

      • http://twitter.com/Jsal017 Javier Salinas

        You won’t actually have to pay for the phone up front. You have the option to make payments on the phone, for example a $650 phone would require a $250 downpayment and 20 payments of $20. Plus you can upgrade whenever you want (I assume as long as you are done with any payments for that line).

  • http://twitter.com/aomia syler

    Can’t go from LTE to 4G waited to long for it. But I like the plan and I wonder if they will throttle their speed after a certain amount used.

  • http://www.facebook.com/profile.php?id=1496513068 Zach Krase

    having the iPhone at full price is not going to bring them back many customers I think this is the begginging of the end of tmobile.

  • http://www.facebook.com/NightLinks Julio NYcity

    Will this move make companies like AT&T, verizon… Lower their prices?

  • tony

    what about salt lake city or provo i dont have 3g or 4g thats sucks como on tmobile hurry up.

  • kupz

    its better buying a phone in full price than getting in 2 yr contract.. its cheaper that way.. i always buy phone in full not the subsidized one.

  • http://www.facebook.com/AnnaBruen Anna Hansen Bruen

    Where did you get that image for the rate plans? I cannot find that rate plan on their website.