NEWS ANALYSIS: T-Mobile, which has had its share of struggles in the highly competitive mobile carrier market, is actually in better shape than some might think.
T-Mobile wasn’t supposed to be around right now. The company’s parent company, Deutsche Telekom, had entered into an agreement to sell T-Mobile to AT&T, to create one of the wireless industry’s biggest companies.
In return, Deutsche Telekom could finally get out of the vexing U.S. carrier market once and for all. It seemed like a victory for AT&T, too, since acquiring T-Mobile would allow it to dwarf its chief rival, Verizon. Acquiring T-Mobile’s subscriber base would have allowed it to do just that. But then the government stepped in and killed the deal. And now, T-Mobile is still around.
On March 26, however, the company made a splash with a special event announcing that after years of waiting, it’s finally offering the iPhone to its customers. Even better, it has officially launched its 4G LTE network, which will allow it to compete more vigorously with the largest carriers in the space—including AT&T. T-Mobile essentially said that the mobile carrier industry is broken and it’s time for things to change.
T-Mobile made a broad, bold statement on March 26
. And despite all of the claims made by naysayers and all of the comments made about the company’s chances of success, it turns out T-Mobile might just be in better shape than you think.
Read on to learn more:
1. The iPhone has arrived
The iPhone could very well be the chief reason T-Mobile isn’t out of the game just yet. Over the last few years, T-Mobile has been attracting iPhone customers
to its service without even selling the device, and soon, it will have the iPhone on sale. That’s good news for T-Mobile.
2. The 4G LTE ramp-up doesn’t take long
Although T-Mobile has launched its 4G LTE network in just a handful of cities, the ramp-up to catch up to companies such as AT&T and Verizon won’t take all that long. In fact, T-Mobile expects its LTE network covering up to 100 million potential customers by the middle of the year and 200 million by the end of 2013. In a country of 330 million people, that’s not bad for one year’s work.
3. Deutsche Telekom is stuck with it
When Deutsche Telekom tried to sell off T-Mobile, the company made it abundantly clear that it wanted no part of the carrier. But the fact that the U.S. government took issue with the deal means T-Mobile’s parent company is stuck with it. If Deutsche Telekom is stuck with T-Mobile, you can bet it’ll try to do everything in its power to derive some more value from its subsidiary.
4. It won’t need to worry about mergers
The failed AT&T-T-Mobile merger actually turned out to be a quite fortunate outcome for the carrier
. T-Mobile earned billions of dollars in the breakup fees, which allowed to build out its 4G LTE network. Plus, the company was all but assured that no two of the major surviving carriers would be allowed to merge in the United States, lest it upset the market balance of power. That means that T-Mobile has a shot a growing by grabbing market share.