NEWS ANALYSIS: Whether or not T-Mobiles plans to sell the iPhone 5 rather than just try to attract buyers of unlocked iPhones remain unclear. But one way or the other, the iPhone is sure to figure prominently in T-Mobile’s business plans.
T-Mobile customers finally have a way to buy Apple’s iPhone 5, although it may not be through T-Mobile just yet. Apple quietly started selling unlocked iPhone 5s in both black and white colors in stores and on-line.
These phones are identical to the GSM phones sold for use with AT&T’s network, except they’re not locked, there’s no contract and there’s no nano-SIM card. An unlocked iPhone will set you back about $650.
While there have been rumors fueled by a prediction from a Merrill-Lynch analyst that T-Mobile would start selling the iPhone this week, eWEEK was unable to confirm that with T-Mobile CEO John Legere, who said in an e-mail that he couldn’t comment about the iPhone at this time.
However, T-Mobile has already refarmed its HSPA+ network in 15 major cities including New York, Washington, San Francisco and (interestingly) Cupertino, California – home of Apple. T-Mobile’s refarming means that the iPhone 5 will work with T-Mobile’s HSPA+ network at speeds up to 22.2 megabits per second, even in areas such as Washington, where the available speed is much higher. The iPhone 5 should also be compatible with T-Mobile’s LTE service when it’s launched in the second half of 2013.
While T-Mobile isn’t ready to announce any specific deals with Apple, the carrier is selling the nano-SIM cards necessary to make the unlocked iPhone 5 phones work on the T-Mobile network. Customers can buy those SIMs for pre-paid service or for a postpaid account, according to several staffers at T-Mobile stores in the Washington, DC, area, all of whom acknowledged that they have the nano-SIMs in stock. T-Mobile usually doesn’t charge for new SIM cards to existing customers, although one sales person told eWEEK that there would be a $20 charge for the nano-SIM.
Prospective customers of the unlocked iPhone 5 will have to wait for about a week to buy an unlocked iPhone 5, according to Apple’s Website. However a call to several Apple stores in the Washington, DC, area confirmed that customers who come to an Apple store can buy the unlocked version immediately.
There’s been a lot of talk about the prediction that Apple and T-Mobile would announce a deal sometime in early December. Some, such as GigaOM’s Kevin Fitchard, writing in The Washington Post pooh-poohed the idea, saying that with only 15 cities currently refarmed for 1900 MHz HSPA+, it would be impossible.
Fitchard apparently is unaware that around 15 regional carriers, most with smaller populations than T-Mobile’s upgraded cities, are already carrying the iPhone 5.
He’s also apparently unaware that T-Mobile already has 1.5 million iPhone that T-Mobile customers are operating on the slower network. So his reasoning doesn’t hold water.
But does that mean that T-Mobile is ready to announce that the carrier will be selling iPhone 5 devices soon, or ever? The real issue isn’t the speed of T-Mobile’s network which is being built out aggressively. It’s the cost of entry into the iPhone club. Sprint paid something like $20 billion to be allowed to sell iPhones on contract. But Sprint had to go to Softbank to get more money after that.
T-Mobile likely has other things to do with its money besides enter into such a costly agreement. So I’m guessing that T-Mobile probably won’t start selling subsidized iPhones on contract any time soon. But that ignores the pre-paid market.
T-Mobile is already selling pre-paid SIMs for iPhones. The only thing it’s not doing is selling the phones. Signing up as an Apple retailer for pre-paid phones and selling them for full price or nearly full price, as is already being done by other carriers, is not nearly as high a bar to clear. So does this mean that T-Mobile will start selling iPhone 5s as prepaid phones? Who knows? But an analysis of the costs involved demonstrates that it’s a lot cheaper to do that than to use a postpaid plan.
The big question, of course, is what will we see from T-Mobile this week regarding the iPhone? It could be the obvious, which is that T-Mobile is selling SIM cards and accessories for the iPhone 5. This is nothing new, since T-Mobile has been doing this for earlier versions of the iPhone for the last two years to support the 1.5 million iPhone users that are already on T-Mobile’s network. In fact, T-Mobile already has an automated setup for iPhone users just to make it easier.
So if there is going to be some kind of iPhone announcement by T-Mobile during the first week of December 2012, I’m betting that it’s an agreement to sell prepaid iPhones. This is basically a zero-effort change by both Apple and T-Mobile since all it requires is a retail sales agreement. There wouldn’t be any complicated subsidies involved, little if any payment to Apple beyond the cost of the phones and it’s something that is already taking place. So T-Mobile customers can rejoice. They can finally get their iPhones.