T-Mo­bile USA to soon sell iPhones, cut sub­si­dies

The Pak Banker - - 6BUSINESS -

LAS VE­GAS: Deutsche Telekom AG (DTE.DE) unit TMo­bile USA will start sell­ing the Ap­ple Inc (AAPL) iPhone in about three to four months and will en­force its plan to get rid of cell­phone sub­si­dies in a sim­i­lar time­frame, ac­cord­ing to Chief Ex­ec­u­tive John Legere.

Legere de­clined to dis­close de­tails about the company's agree­ment with Ap­ple, ex­cept to say that T-Mo­bile USA's tim­ing for sell­ing the smart­phone would be sooner rather than later, along with its sub­sidy elim­i­na­tion plan.

"They're all, I would call them, in three to four months as op­posed to six to nine months, Legere said in an in­ter­view at the Con­sumer Elec­tron­ics Show in Las Ve­gas. T-Mo­bile USA said late last year it would elim­i­nate hand­set sub­si­dies in 2013 to give cus­tomers more flex­i­bil­ity and lower ser­vice prices. It said at the same time that it will also sell the iPhone, mak­ing it the last U.S. mo­bile provider to do so.

The company hopes to at­tract cus­tomers from big­ger ri­vals like AT&T Inc and Ver­i­zon Wire­less with the com­bi­na­tion of sell­ing iPhones and re­mov­ing sub­si­dies, which would be a first for the U.S. wire­less in­dus­try.

The ex­ec­u­tive said he could pos­si­bly in­crease T-Mo­bile USA's mar­ket share by 5 per­cent or higher from big­ger ri­vals who still de­pend on sub­si­diz­ing phones to give their cus­tomers a de­vice dis­count in ex­change for ty­ing them into a two-year con­tract.

"If the old in­dus­try struc­ture chooses to ig­nore what we do," he said, "That's a po­ten­tial." While the company is cur­rently fo­cused on gain­ing reg­u­la­tory ap­proval and clos­ing its merger with MetroPCS Com­mu­ni­ca­tions (PCS) in the sec­ond quar­ter this year, Legere said that he might not stop there.

For ex­am­ple, the ex­ec­u­tive said he could ex­plore a re­la­tion­ship with satel­lite provider Dish Net­work Corp (DISH) or a com­bi­na­tion with smaller ri­val Leap Wire­less In­ter­na­tional Inc (LEAP).

T-Mo­bile USA is cur­rently seek­ing ap­proval to merge with smaller wire­less ri­val MetroPCS and an­a­lysts have long said that MetroPCS and Leap net­works would go well to­gether. Leap is "one of those things that makes ex­treme sense for us to look at" Legere said. Mean­while Dish, which re­cently gained ap­proval to use air­waves it bought for a wire­less ser­vice, has said that it is look­ing at op­tions in­clud­ing a net­work shar­ing part­ner­ship with another U.S. wire­less car­rier.

An­a­lysts have said that they see Sprint Nex­tel Corp or TMo­bile USA as the most likely part­ners for Dish. Legere said that he has not had talks with Dish, but when asked if he would con­sider a part­ner­ship with the satel­lite company he said: "The an­swer is ob­vi­ously yes." "They'd be in­ter­est­ing for us to talk to and we'd be fas­ci­nat­ing for them," he added. While Dish an­nounced to­day that it will bat­tle Sprint to buy another smaller wire­less company, Clear­wire Corp (CLWR), some an­a­lysts have said that it is un­likely to suc­ceed in that bid so could still need a wire­less net­work part­ner.

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