T-Mobile USA to Invest $4 Billion in New LTE Network

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T-Mobile USA says it is gong to invest $4 billion in its business, including use of the spectrum it received from AT&T as part of the “breakup fee” for failure of the AT&T effort to buy T-Mobile USA, to launch its own Long Term Evolution network in 2013, the company says.

The $4 billion network modernization and 4G evolution effort, which will improve existing voice and data coverage and pave the way for LTE service by 2013, also will, at some point require additional spectrum, T-Mobile USA says.

As part of the modernization effort, T-Mobile USA will install new gear at 37,000 cell sites and “refarm” some spectrum to launch LTE in 2013. The key part of that effort is the integration of additional spectrum T-Mobile will receive as a result of the termination of the AT&T transaction.

T-Mobile USA also says it will deploy HSPA+ in its PCS (1900 MHz) spectrum band.

The new LTE 4G network will be available in “the vast majority of the top 50 markets,” with 20 MHz worth of bandwidth in 75 percent of the top 25 markets, the company says.
But not all the investments are network related. T-Mobile has for some time been trying to win more business users, and now plans to add 1,000 new sales people as part of that effort.

T-Mobile USA also will be increasing its advertising spending and looking for more mobile virtual network operator (MVNO) partners.

T-Mobile USA also will remodel its retail outlets and likely expand the number of locations, as well.

In the fourth quarter of 2011, T-Mobile USA reported service revenues of $4.57 billion, down from $4.69 billion in the fourth quarter of 2010. Operating income (OIBDA) was $1.40 billion, up from $1.34 billion reported in the fourth quarter of 2010.

Blended average revenue per user in the fourth quarter of 2011 was $46, consistent with the fourth quarter of 2010.  Net customer losses were 526,000 in the fourth quarter of 2011, compared to 23,000 net customer losses in the fourth quarter of 2010.

T-Mobile USA had 33.2 million customers at the end of fourth quarter 2011, compared to 33.7 million customers at both the end of third quarter 2011 and the end of fourth quarter 2010.

T-Mobile USA executives noted that the inability of the firm to sell the Apple iPhone did have a material impact on the company’s fortunes during the year, especially in the fourth quarter, when the Apple iPhone 4S launched.

Churn from branded customers was 3.6 percent in the fourth quarter of 2011, up from 3.2 percent in the third quarter of 2011, and 3.4 percent in the fourth quarter of 2010.

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