T-Mobile Is in a Good Position For Rapid Growth: 10 Reasons Why

By Don Reisinger  |  Posted 2013-03-26

T-Mobile Is in a Good Position For Rapid Growth: 10 Reasons Why

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.

T-Mobile Is In a Good Position for Rapid Growth: 10 Reasons Why

5. Mobile hotspot is important

In all of T-Mobile’s new data plans, the company offers mobile hotspots. That’s an important feature that can’t be overlooked. Companies, especially, like to be able to share hotspots from one device to another and T-Mobile is making that easier. With hotspots and 4G LTE enterprise might warm a bit more to T-Mobile.

6. T-Mobile’s Plans Are Comparatively Cheap

It’s shocking to see how cheap T-Mobile’s plans are. The company’s cheapest option for a smartphone is $50 a month, offering 500MB of data, plus unlimited talk and text. Bumping the data up to 2GB costs customers $60 per month. T-Mobile might have found its stride with its new pricing plans.

7. Simplicity attracts customers

Simplicity is everything in the mobile space right now. With companies like Verizon taking a pick-and-choose approach to plans and what’s in them, customers are confused. What’s worse, they don’t know for sure how much they’ll have to pay when they sign a contract. T-Mobile, however, simplifies all that, by saying that it’ll offer unlimited texting and calling, and it’s up to customers to choose the data plan. It’s simple, and it’ll attract a lot of customers.

8. A new take on device pricing

T-Mobile is doing something very, very interesting when it comes to device pricing. Rather than take on subsidies, the company is doing away with them. In their stead will be a new pricing model in which customers make a down payment on a product and pay a set fee thereafter. For the iPhone 5, for example, customers will need to put $99 down and then pay $20 per month for use of the device. The iPhone 4S will set customers back by $70 at purchase and then $15 after that. T-Mobile claims customers could save over $1,000 through that pricing and its new plans.

9. GSM is an advantage

It’s important to understand just how important GSM is when it comes to being a carrier in the U.S. All over the world, GSM is the standard wireless technology. In the U.S., competitors Verizon and Sprint are using CDMA technology. Most of their devices now come with global connectivity, but not all. Every device sold by T-Mobile and AT&T, because they’re on GSM, can work globally. Those devices can also be ported between the two carriers and to other GSM services without having to buy a new device. That’s a major advantage for T-Mobile that cannot be overlooked.

10. It’s a scalable business model

One of the best things about T-Mobile’s decision to change its pricing and plans is that it’s fully scalable. Even as the company grows larger with new customers, it can offer the same pricing and make out. T-Mobile isn’t engaging in an introductory deal here; the company is in it for the long haul. Its new plans and pricing might just carry it through.

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