updated 08:40 am EST, Thu February 23, 2012
T-Mobile uses failed ATT merger to add LTE
T-Mobile in reporting its fall quarter's results revealed that it would join other major US carriers in adopting LTE. The breakup fees and spectrum transfers from AT&T's abandoned takeover deal gave it the resources to add the faster network in "key US markets." It planned to use its existing AWS spectrum in the 1,700MHz and possibly 2,100MHz bands and would have a deployment in 2013.
The company was already planning a $4 billion investment that was partially intended to add HSPA+ coverage in the 1,900MHz band, which would help both to free up spectrum for LTE as well as increase the number of people who could use 3G. It would let those with unlocked devices on T-Mobile, such as the iPhone, get 3G that they had normally been denied in the areas where the coverage had been switched. AT&T customers roaming on T-Mobile should likewise keep their 3G.
In the meantime, T-Mobile was continuing to struggle and was unusually specific among US carriers in specifically blaming the lack of the iPhone for its problems. Although its pre-depreciation operating income was up slightly to $1.4 billion, the carrier argued that the iPhone 4S launch had reversed improvements in its ability to keep customers. A total of 706,000 contract customers were lost in the fall 2011 quarter, or nearly twice as many as the 389,000 it had lost during the summer.
Churn, or the ratio of departing customers, had dropped but was still higher overall than others, at 3.6 percent overall and 2.6 percent just for the core contract subscribers. AT&T and Verizon have usually been under two percent overall and increasingly closer to one percent.
T-Mobile is still hopeful of a turnaround and is planning to carry new Android devices like the Samsung Galaxy S Blaze 4G. However, its repeated mention of the iPhone, which appeared seven times in its release despite not being part of the existing lineup, made it clear that the company wasn't finding success in Android and wanted to lean on Apple for help. T-Mobile was the first Android-supporting carrier in the world, picking up the G1 in October 2008, but ultimately didn't benefit significantly from the strategy.
Moving to 1,900MHz HSPA+ and adding 1,700MHz LTE may be key to these goals. Along with immediate 3G compatibility, the LTE would be on a similar frequency to that used by the top three Canadian carriers and thus let Apple make one LTE iPhone that could cover most, if not all, of North America.