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Wednesday, July 10, 2013

The iPhone Hasn\'t Saved T-Mobile USA Yet

There's no question that finally being able to sell Apple‘s iPhone was good for T-Mobile USA, the struggling carrier that bled many subscribers to its rivals over the last few years, partly because it lacked the iPhone. Now the question is when - or if - adding the phone will help lead the company to a meaningful comeback.

Kantar Worldpanel, a research firm, published a report on Monday suggesting that T-Mobile has an awfully long way to go. The company's share of the wireless market was 10.1 percent in the three months ending in May, down from 13.5 percent over the same period last year.

It's worth noting that the iPhone didn't become available on T-Mobile until April. And Dominic Sunnebo, an analyst at Kantar, said T-Mobile's strength with the iPhone appeared to be attracting people who were buying smartphones for the first time. Of T-Mobile consumers who bought an iPhone, 53 percent had previously owned a traditional cellphone, also called a feature phone, he said. The problem for T-Mobile, though, is the dwindling number of people still using feature phones. Earlier this year, global shipments of smartphones surpassed feature phones.

To stage a true comeback, T-Mobile will need to lure subscribers from rivals like AT&T and Verizon. That still appears to be a difficult task, and not only because both AT&T and Verizon have long offered the iPhone. Both those carriers are significantly ahead of T-Mobile in the race to deploy fourth-generation wireless networks - and when it comes to choosing a carrier, customers care about the coverage and speed of their service. T-Mobile only recently started turning on its fourth-generation network, called LTE, in a small number of cities, whereas AT&T has deployed 4G LTE in about 300 markets, and Verizon Wireless h as LTE in about 500 markets. T-Mobile is expected to make more announcements about its network on Wednesday at a press event in Manhattan.

For now, T-Mobile is trying to separate itself from the competition with its phone plans. In a marketing campaign, the company calls itself the “uncarrier” - a wireless company that is different because it cares about what customers want. Part of the campaign involved breaking away from traditional two-year contracts and offering unlimited data plans.