T-Mobile USA to Spend $13.0 Billion for 2G and 3G Deployments

T-Mobile USA to Spend $13.0 Billion for 2G and 3G Deployments

Although this planned expansion and enhancement will better position the carrier for effective competition in the future, Dotson did warn that this cost impact will prevent T-Mobile from achieving margins in the mid-30 percent range over the next two years. According to Dotson, if you look at where T-Mobile USA margins are today: low 30, 31, where the company has been over the last 12 months, there is clearly a path for the company to feel good about getting to that mid-30s area on margin. This T-Mobile investment refers to both of the company’s 2G and 3G deployment. 2G and 3G refers to the second and third grade generation of mobile phone standards and technology. The Inquirer reported last fall that T-Mobile USA would be making a major announcement about its 3G network rollout on December 6. Other news emerged as early as 2005 that T-Mobile USA would launch its 3G network by the end of 2006. The carrier is making good on its promise – just a year late.

In October of 2007, the carrier announced plans to spend nearly $2.7 billion on its 3G network rollout, which is expected to make use of the $4.2 billion worth of spectrum it won in the AWS auction. At the time, T-Mobile International’s CEO Rene Obermann said in a statement, "We're looking at the area of user generated content... where we could leverage or basically mobilize the trends which we can see on websites such as MySpace, YouTube or others... as well as data management scenarios and consumer mobile email. We want to leverage existing behavior... when it comes to mobile music and TV, I wouldn't consider them big revenue generators." The first 3G device was sold by T-Mobile USA this past October in select retail stores in New York City: The Samsung T639, a quad-band GSM/EDGE and WCDMA 1700 MHz clamshell. It's about time that handset had a nationwide network. T-Mobile expects to strengthen its market positioning with this investment, ensuring that the company is better able to effectively compete in this space. As the competition intensifies for mobile carriers, the quality of service and functionality that it can provide to its customers will contribute greatly to its long-term success.