T-Mobile's Prospects Soar as It Fires Up LTE Network, iPhone Sales
At this point, it appears that the other US carriers are watching to see if they need to get off the contract bandwagon and become “un-carriers” too. I suspect that after a few more months of performance like this from T-Mobile and there will be changes. But I don’t think that those changes will include a complete dropping of subsidies and contracts by the other carriers except maybe Sprint, which also needs to re-energize itself. What’s more likely to happen is that Verizon Wireless and AT&T will find a way to offer no-contract options similar to what T-Mobile is offering, while continuing to offer subsidized phones for as long as they can milk that cow. If you do the math, a subsidized phone is hugely profitable for those carriers. So what’s next? Verizon Wireless will have to think of new ways to attack T-Mobile, since the previous “They don’t have LTE” commercials on television won’t work anymore. AT&T may have to develop customer service, since that carrier needs a way to keep customers from departing en masse for T-Mobile where their phones will work fine, the costs are lower and the customer service is better. I suspect we’ll start seeing attack ads from AT&T any time now. I’m not sure what to say about Sprint. That carrier has so many problems that only a mountain of money from SoftBank will help and it may be a while before there’s much visible improvement. Meanwhile Sprint has enough on its plate that attacking T-Mobile is pretty low on the priority list.Farther down the road, T-Mobile will start getting the new Apple devices along with everyone else, so T-Mobile will likely get timely access to the iPhone 5S and iPad 5 when those new models hit the market. But T-Mobile will also carry Samsung Galaxy S4 when it comes out. Of course, T-Mobile is planning to have most of the US covered by LTE before the end of the year. You have to wonder who turned on T-Mobile’s afterburners last month. Maybe it was CEO John Legere deciding to exceed expectations. I’ll ask him that question if he grants the interview I’ve requested.
For its part, T-Mobile is going ahead with its acquisition of MetroPCS. The deal has passed through all of the regulatory hoops, but there’s a stockholder lawsuit (isn’t there always?) that might slow things down. When that happens, T-Mobile will start trading in MetroPCS phones for phones that handle GSM and MetroPCS customers will magically become T-Mobile customers.