T-Mobile to Offer Apple Products in 2013, Executives Say

T-Mobile USA will begin offering Apple products on its network in 2013, Deutsche Telekom CEO René Obermann said Thursday at a webcast conference in Germany. T-Mobile CEO John Legere implied in a separate presentation during the conference that the products T-Mobile offers will include the iPhone, but did not say what other devices it might make available. “When we do announce what we're going to deploy, it will clearly be better and more effective” than recent media reports have suggested, he said. A T-Mobile spokesman said additional information on T-Mobile’s Apple offerings would be available later. An Apple spokesman confirmed that T-Mobile would begin carrying the company’s products next year, but declined to discuss specific models.

T-Mobile customers have been able to access the carrier’s network through the “unlocked” version of the iPhone -- 1.7 million of the devices now access the T-Mobile network -- but the carrier was being hurt by not carrying them directly, Legere said. “A certain number of people wouldn’t come to our stores if we didn’t have the iPhone,” he said. The carrier lost 492,000 of its branded postpaid subscribers during Q3, though adds in its prepaid customer and wholesale customer bases helped the carrier post a net gain of 126,000 subscribers for the quarter (CD Nov 9 p6). T-Mobile’s commitment to carry Apple products will not be nearly the size of commitments that Sprint Nextel and others have made, Legere said. “We worked very hard for a deal that made sense for us.”

The Apple deal will also work into the T-Mobile strategy of targeting disaffected AT&T customers, Legere said. While iPhones originally made for AT&T can also operate on T-Mobile networks because the carriers both run on GSM technology, T-Mobile and AT&T operate on different frequencies, he said. T-Mobile’s plan to switch its HSPA Plus services from the current 1700 MHz band to the 1900 MHz band will help improve download speeds on iPhones that migrate from AT&T to T-Mobile, Legere said. Unlocked iPhones that used T-Mobile had encountered slower download speeds while on the 1700 MHz band, he said.

The Apple deal is the latest step to improve the competitiveness of T-Mobile, Obermann told investors. Deutsche Telekom struck a deal in October with MetroPCS to merge with T-Mobile and create a more competitive combined carrier (CD Oct 4 p1). T-Mobile has made several strategic spectrum deals in recent months, agreeing in June with Verizon Wireless to swap AWS-1 spectrum licenses and made a separate deal in August to swap spectrum with failed merger partner AT&T (CD Oct 11 p13). T-Mobile is also working on an ongoing network modernization effort to upgrade to 4G LTE. The carrier is partially financing that upgrade through a $2.4 billion deal to sell long-term leasing rights on its 7,200 towers to Crown Castle International, a deal which closed Monday (CD Dec 3 p17).