T-Mobile, the lone U.S. national carrier to not officially carry Apple’s iPhone, may finally announce a deal with the Cupertino company next week, according to Merrill Lynch analyst Scott Craig, as reported by Fortune. Mr. Craig told investors Thursday that “speculation is heightening” for a deal between Apple and Deutsche Telecom, T-Mobile’s parent company, to bring the iPhone to the carrier’s 33 million U.S. customers.
The news of an impeding deal comes just one week after T-Mobile COO Jim Alling seemed to downplay the prospects of a T-Mobile iPhone. “Make no mistake about it: We would love to carry the iPhone,” he said at the 12th Annual Technology, Media & Telecoms Conference in Barcelona. “However, we want the economies to be right for us.”
Despite his pessimistic outlook on bringing the iPhone to the carrier, Mr. Alling did admit that the phone’s absence was costing T-Mobile customers. “We recognize that it has been a point of churn for us,” he acknowledged.
A deal to bring the iPhone to T-Mobile, which has struggled heavily in recent years and was prevented by the U.S. Department of Justice from merging with AT&T in 2011, would be good for both companies. T-Mobile would be position to hold its current customers, gain back old customers who left because of the iPhone but prefer T-Mobile’s service in their geographic area, and offer an incentive to the incoming MetroPCS customer base, which will join T-Mobile after the two companies announced a merger in early October.
On the other side of the deal, Apple would find its flagship product available on every major national carrier for the first time. Should the deal go through, Mr. Craig calculates that Apple would then have access to 98 percent of the U.S. post-paid mobile market and 75 percent of the country’s total mobile subscribers.
Although a large symbolic milestone for Apple, its deal with T-Mobile will likely be of limited financial value, Mr. Craig argues, with a T-Mobile deal adding about 4 million iPhone shipments to the total of 179 million estimated for calendar year 2013, boosting revenue by about 1 percent and earnings per share by about 2 percent.
Many customers did not have the patience to wait for an official deal. Over 1.5 million T-Mobile subscribers currently use an unlocked iPhone on the carrier’s GSM network. With the iPhone 5 and new iPads moving to LTE networks, however, T-Mobile is slowly preparing an LTE rollout of its own, although it lags far behind competitors AT&T and Verizon, which already have extensive LTE coverage. The carrier is on track to launch LTE in the second half of 2013 which will allow its existing network and that of MetroPCS to merge going forward.
Any announcement regarding a T-Mobile iPhone deal is expected to come next Thursday or Friday.