How Apple’s revolutionary iPhone led to the sale of T-Mobile USA

15 years ago

“Deutsche Telekom’s announcement over the weekend to sell its American wireless unit, T-Mobile USA, to AT&T for $39 billion ended a decade-long foray into the American market that was undermined, in part, by one big event: the advent of the iPhone,” Kevin O’Brien reports for The New York Times.

“Until Apple introduced its highly popular touchscreen device in 2007, which went on to become the world’s leading smartphone, Deutsche Telekom had been generating decent sales from its American operation, with growth in some years surpassing that achieved in Germany,” O’Brien reports. “But after the iPhone went on sale, sold exclusively at first by AT&T in the United States, T-Mobile USA began to lose its most lucrative customers, those on fixed monthly plans, who defected to its larger American rivals — AT&T and Verizon Wireless, which began selling the iPhone in February.”

O’Brien reports, “The percentage of T-Mobile USA’s contract customers fell to 78.3 percent in 2010 from 85 percent in 2006, according to the company’s annual reports. During 2010 alone, T-Mobile USA said it lost 390,000 contract customers to rivals. ‘The iPhone effect cannot be underestimated in this decision,’ said Theo Kitz, an analyst at Merck Finck, a private bank in Munich. ‘Without being able to sell the iPhone, T-Mobile was in an unsustainable position and T-Mobile USA became a problem child.'”