T-Mobile Finally Gets the iPhone

Rich Tehrani : Communications and Technology Blog - Tehrani.com
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T-Mobile Finally Gets the iPhone

While spending time in a T-Mobile and Verizon store in the same cityiphone5.png recently I couldn’t help but notice the customers at the Verizon stores were dressed better and seemed far more affluent. This makes sense as T-Mobile offers cheaper service and it is common for people who can’t afford an AT&T or Verizon data plan to unlock an iPhone from AT&T and activate it on T-Mobile. They then access data when WiFi is available for free.

The latest research I found from Strategy Analytics has the spread in ARPU or average revenue per user between these two carriers at $11.45 per month or almost $140 per year. And this spread has grown from $9.15 just two quarters ago.

T-Mobile has said there are customer who wouldn’t even consider the carrier because they didn’t have the iPhone and since the typical Apple customers is above-average in affluence, this makes sense. So now that T-Mobile will be selling Apple products, it will likely put additional pressure on the data plan prices of AT&T, Verizon and now Sprint who recently started selling Apple products as well.

Moreover, the German-backed company will stop subsidizing devices and instead sell through installment plans. Expect to see offers where you can pay perhaps $100 up front and spread the remaining payments over 20 months or so. This and a new ad campaign designed to be “in your face” will position the wireless network operator as the “Un-Carrier.”

There is no doubt a renewed energy at T-Mobile and its parent, Deutsche Telecom as a result of the Softbank investment in Sprint. There is nothing like the competition making a huge bet on something to get the rest of the market excited about the same opportunity.

In Fairfield County, CT where TMC is headquartered, T-Mobile is likely the worst of the four major wireless carriers based on my experience but the company is improving its coverage and has a huge opportunity to gain share by continuing to offer lower prices than the competition.

This news will likely also expose the company to wealthier customers as everyone (even those buying an Apple product) seems to like a bargain.

As an aside I find it ironic that the major carrier to be first with Google integration in one of their phones was the last to get Apple products.


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