Feb. 23, 2012 at 5:36 PM ET
For all of T-Mobile’s talk about bouncing back from its failed merger with AT&T, it's nearly silent on the one thing consumers (and investors) care about: the iPhone.
T-Mobile is the only U.S. carrier that doesn't carry Apple's runaway hit. Although CTO Neville Ray said the extensive — and expensive — upgrades being planned would make its network compatible with the iPhone, he and Humm brushed aside reporters' questions about plans to offer it. Analysts are getting antsy with the company's propensity for hitting the mute button whenever "iPhone" is uttered.
Consumers don't care about the company's grand plans for infrastructure upgrades, a push into B2B and a rebranding campaign. They just want the iPhone, and they're going elsewhere for it. T-Mobile lost roughly 800,000 postpaid subscribers in the fourth quarter, twice as many as analysts expected. Postpaid — that is, contract — subscribers bring in more money than prepaid customers, so this is a sharp blow.
"We believe it is still seeing a similar rate of customer loss in January," Credit Suisse analyst Justin Funnel said in a note Thursday.
MGI Research analyst Tero Kuittinen said, "It's looking grim particularly now that Sprint got the jump on T-Mobile" in the race for the iPhone. "I think many of the value-oriented consumers who wanted the iPhone may have opted for Sprint," he said.
Back in December, Forrester Research analyst Dan Bieler didn't mince words in a blog post about the carrier's woes. "Its image is increasingly trending toward cheap rather than good value, given its patchy network coverage, especially in rural areas," Bieler wrote. Not having the iPhone makes it even harder for T-Mobile to argue that its infrastructure is on par with that of its competitors.
T-Mobile also hasn't done itself any favors in this department. "We were surprised by the magnitude of the discount between T-Mobile and all three national carriers," Credit Suisse analysts wrote in a January report. It built its brand by undercutting its competitors, but now it wants to avoid being pigeonholed as the cheap alternative.
"Now they're facing this really awkward process of trying to convince customers that they're not just value, but cutting-edge," Kuittinen said. "It looked like they truly believed having the most appealing pricing would be enough. It didn't work."