How Apple’s iPhone crippled T-Mobile USA, a dying company

“The Justice Department is suing to prevent AT&T’s proposed acquisition of T-Mobile USA, saying the deal would raise prices and not help customers, despite AT&T’s claims it would improve service by giving it more spectrum to deploy for 4G and 3G services,” Galen Gruman reports InfoWorld.

“T-Mobile customers can breathe a sigh of relief, as they’re less likely to be absorbed into AT&T’s world of bad service. But ultimately, T-Mobile is a dying company,” Gruman reports. “Despite its slightly lower prices and a reasonable set of cellphones and Android smartphones, its contract-based customers are fleeing to Verizon Wireless, AT&T, and to a lesser extent Sprint, and its pay-as-you-go customers are looking more and more at the nation’s fifth largest carrier, Metro PCS.”

Gruman reports, “The iPhone is a big reason T-Mobile is dying. And if Sprint gains the iPhone in October, as the Wall Street Journal has reported, it will die even faster.”

Read more in the full article here.
 

28 Comments

    1. Agreed, if AT&T doesn’t buy T-Mobil they’ll just go out of business anyway. leaving us with the dreaded three player market everyone seems so afraid of one way or the other. No one else uses the same equipment as T-Mobil except AT&T because they’re both using GSM. Sprint couldn’t afford T-molbil even if they could use their equipment. Verizon can’t use the equipment on top of the fact that they already have more then 50% share of the market.

      This AT&T T-Mobil merger always seemed like a good idea to me. It’s not as if AT&T would get them for free. They’re paying $39 billion to get them.

      1. care to back up your assertions with facts, Ballmer Nut?

        First: the Deputy Attorney General, James Cole (who served in the Justice Department throughout the Reagan and Bush 41 administrations and is highly recognized for prosecuting fraud and corruption), correctly interpreted the law as written. Your shifting the focus to Obama only underscores your own misplaced biases and lack of understanding of the issues.

        Second: FCC Chairman Julius Genachoski — another in a string of chairmen who have not taken action to prevent “big business” from executing their own strategies — has not yet released final determination. However, it is worth noting the the charter of the FCC is to maximize benefit to the American public, including competition and pricing impacts. These far outweigh the few thousand call center jobs AT&T proposes to relocate stateside after they gut T-Mobile’s offices and shut down T-Mobile retail stores.

        Third: Jesus was an anti-big business community organizer, does that make his accomplishments “head scratchingly bad” too?

        Finally: T-Mobile USA is not dying. What a pathetic misleading headline. It might be nice to have better capitalization from its very healthy parent company Deutsch Telekom, the largest telecom company in Europe, and it’s at a competitive disadvantage without the iPhone, but it’s actually a solid company. Sure, significant subscriber losses occurred after AT&T announced its intent to kill … er, acquire … its competition. With an iPhone 5, T-Mobile would welcome all its customers back in no time, without any “help” from AT&T.

    2. You guys act as if AT&T is the only potential buyer for T-Mobile. They aren’t. DOJ has to protect consumers from predatory business practices. A dominant AT&T and Verizon is bad for consumers. T-Mobile is a profitable concern and if Deutsch Telecom wants out of the American market they have the option of spinning off T-Mobile of looking for other suitors. For instance, Metro PCS or private equity firms could be interested.

      1. AT&T really is the only company that could reasonably buy T-Mobile. Sprint and Metro PCS, both in debt, couldn’t come close to affording T-Mobile, plus they have incompatible infrastructures.

        T-Mobile is still profitable, but it’s sinking very fast and losing customers. It won’t be profitable in less than a year. The parent company wants out…bad.

        If the merger doesn’t go through, T-Mobile will be shut down, and their assets auctioned off…even if it goes through the hands of a private equity firm. Of course their assets will end up going to AT&T, and so will most of their customers.

        The customers who don’t go to AT&T would go to the remaining carriers they would have the choice to go to anyway.

        By allowing the merger to go through, the inevitable happens with less of an impact to T-Mobile customers. In fact, terms and conditions could be imposed which would benefit customers above what they would otherwise face.

        This is going to happen.

  1. This is to bad. I’ve been really happy T-mobile customer for about 5 years. I have a family plan and it costs the four of us about 25-28 per person each month. Of course we don’t have smart phones either. Coverage in the Pacific Northwest all the way down to California has never been a problem…

  2. Apple needs to promote competition by sending the iPhone to T-Mobile! I prefer their pay-as-you-go plans to the contact plans. And theirs works the best for me. Americans are accustomed to be raped by the carriers, and T-mobile has never learned how to do it.

  3. I was with T-Mobile up until the original iPhone was released in June 2007 and was quite happy with them. I’m sure there are at least a million others like myself that left them simply due to the iPhone.

  4. I think Galen’s analysis is a pile of doodoo, to be honest. It ATT supposedly has such bad customer service, why wasn’t there the mass flight to Verizon once it got the iPhone? According to Galen and other press folks, this spelled the death knell to ATT.

    Nothing of the sort happened, in fact ATT has continued to post strong smartphone growth. I’ve been a very happy ATT customer since getting the first iPhone four years ago, I really can’t say anything bad about them, either in terms of service, voice quality, or data. Obviously millions of satisfied ATT customers feel the same.

    1. AT&T customers that don’t like their service but haven’t switched to verizon have not done so for many reasons.
      An iPhone is pricey. In my familiy we have three. But we buy only one per year. So I am only out $300 per year for the phone. To switch I would have to come up with $900 just for the phones. Then I would have to pay the early contract termination fees and then the new phone service activation. It is expensive to switch. And on exchange for switching carriers I would be reduced from a world phone to one that works in just a few other countries and with sport coverage at best.
      Then there is the phone’s potential. With the GSM phone I cam unlock the phone (which is within my legal rights according to the government) and I can take it to any GSM carrier. With CDMA I don’t have that option. Also with the world standard GSM iPhone I am using the current version of iPhone firmware. The CDMA iPhone is always running behind in updates.

      The only way for me to switch would be if I could keep my phone. So it’s not as easy to switch as you make it sound. I forecasted that relatively few AT&T subscribers would leave for the first two years because of the very reasons listed above. The real trick will be seeing if AT&T cam pull off a real LTE upgrade before an LTE iPhone comes out. Because then the phones will work multicarrier and with a couple years custerms will be among the switch if they are still unhappy with AT&T

  5. T-mobile’s prices are far less than AT&T. I have 5 lines plus an internet home phone through T-mobile. I save a bundle every month over what I was paying AT&T with less lines.

    Even if the iPhone came to T-mobile I’d stick with the Mytouch because with it I get 4g speeds and free hotspot for my iPad and MBA unless I could get those with the iPhone 5.

    I had an iPhone both with AT&T and T-mobile. While I most definitely prefer it over the Mytouch the faster data and hotspot are more important to me. Two of my 5 lines are unlocked iPhones on T-mobile.

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