This Carrier Wants the iPhone Tomorrow -- With or Without Apple's Approval

The iPhone 5 launch on Wednesday, Sept. 12, is sure to be the most important event for tech investors this year. The Motley Fool will be hosting a live chat where our top tech analysts will answer your questions and break down what the announcement means for Apple and tech investors everywhere. Be sure to swing by Fool.com at 12:45 p.m. ET tomorrow for all your coverage of Apple's next big announcement.

Just ahead of Apple's (Nasdaq: AAPL  ) iPhone 5 announcement tomorrow, the odd man out among domestic wireless carriers is feeling the sting. T-Mobile has never gotten any official iPhone love, but that's never stopped it from trying to lure owners of unlocked iPhone to its network.

BYOI: Bring Your Own iPhone
The carrier is now kicking up its marketing efforts into high gear, starting on -- you guessed it -- Sept. 12, which is iPhone 5 day. T-Mobile has always been the most open-armed when it comes to devices, featuring its cheaper, no-contract (and no-subsidy) Value plans if a subscriber brings his or her own device. That's always applied to unlocked iPhones, of which T-Mobile claims to have more than 1 million running on its network.

Starting tomorrow, T-Mobile's branded retail stores will even have iPhone 4S demo units available, and its sales staff will be trained on helping bring iPhone users over. The carrier is also developing iOS versions of its own apps for account management and visual voice mail, among others. Both T-Mobile and Sprint Nextel (NYSE: S  ) have taken to featuring cost savings relative to AT&T (NYSE: T  ) and Verizon (NYSE: VZ  ) on their marketing materials, and this time is no different.

Source: T-Mobile.

Source: T-Mobile.

T-Mobile's pitch is that an unlocked iPhone user can save $50 per month compared with Ma Bell. The company sums up its strategy in one sentence: "Bring your unlocked iPhone to T-Mobile and save."

Bleeding pink
This is the biggest marketing move by an unofficial iPhone carrier to get its hands on the iPhone. The lack thereof has been a major contributing factor to T-Mobile's woes in recent years. It continues to bleed contract subscribers at an accelerating pace, with 557,000 net lost last quarter.

Metric

Q2 2011

Q1 2012

Q2 2012

Branded contract net customer losses 536,000 510,000 557,000

Source: T-Mobile.

Meanwhile, its three larger rivals continue to activate iPhones mercilessly.

Source: SEC filings, conference calls.

Source: SEC filings, conference calls.

All three of them should also be official iPhone 5 carriers starting tomorrow.

Unlimited, unlocked, and un-fast
The technical stars have simply never lined up for T-Mobile. Historically, iPhones have never been compatible with T-Mobile's 3G network, so unlocked users were relegated to 2G data speeds along with any cost savings they were able to enjoy. Starting last year though, T-Mobile began refarming its spectrum to bring 3G speeds to the iPhone.

T-Mobile claims that its internal tests using an unlocked iPhone 4S are able to reach 70% faster download speeds, on average, relative to AT&T's network. Those areas are few and far between, and T-Mobile is far behind the curve on this one.

Of course, that's before you even consider that the iPhone 5 will feature 4G LTE support, where T-Mobile has exactly zero coverage. Its LTE network isn't expected to roll out until next year. T-Mobile has been trading with numerous parties to facilitate its LTE deployment. It's doing a spectrum swap with Verizon as well as Leap Wireless (Nasdaq: LEAP  ) , not to mention the spectrum consolation prize it received from AT&T after the failed merger.

The net result of all of these trading places for T-Mobile will be the eventual rollout of LTE, but for the time being, T-Mobile remains far behind its larger rivals in technical capabilities. With no LTE coverage, there would be little to no point in even offering the iPhone 5 on its network, so it'll be targeting table scraps from older-generation unlocked models, cast aside as buyers upgrade.

T-Mobile wants the iPhone tomorrow, with or without Apple's approval. It just won't be the iPhone 5.

You have only one day now before the iPhone 5 hits. Take the time to get access to this comprehensive iPhone 5 report that the Fool has put together. Sign up today and get a detailed comprehensive write-up, an iPhone 5 special report, as well as regular future updates for no additional cost! Get started.

Fool contributor Evan Niu owns shares of Verizon Communications, AT&T, and Apple, but he holds no other position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Apple and creating a bull call spread position in Apple. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2013736, ~/Articles/ArticleHandler.aspx, 10/22/2014 6:17:25 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement