T-Mobile USA says no 3G until 2007

T-Mobile USA just wrote its own obituary. The CEO of the company admitted that he doesn't see them launching a high-speed 3G wireless service within the next two years, mainly because they just don't have the spectrum for it right now. So basically T-Mobile subscribers will have wait until 2007 if they want 3G, but the cold reality is that a lot of them probably won't want to wait and will defect to other carriers that have been a little more proactive about 3G. Verizon's already started rolling out their high-speed EV-DO service in a bunch of different cities, Sprint's going to be building out their own EV-DO network soon, Cingular is currently testing a high-speed UMTS service which they hope to introduce next year (and of course, they recently absorbed AT&T Wireless' 3G service, which is available in a handful of cities). T-Mobile is currently upgrading their network to EDGE, which is like a faster version of GPRS, but they should have started doing that a long time ago. By the time they have that ready, everyone else will already be a step ahead.

[Justin @ Dec 19th 2005 12:08AM]

Yet another reason T-Mobile HAS to be one of the worst carriers for anyone, you know, serious about mobile communications. Only thing they have going for them is the Sidekick - which now Danger I'm sure will be pursuing other carriers, since they've said that the next device will be a 3G-enabled one. (yay!)

[TheZodiac @ Dec 19th 2005 12:08AM]

Most people "wont want to wait" for a technology they "dont know how to use" and "dont have a real use for" will not even hear the buzz of this - 3G for GSM (UMTS, if they decide to go that route) is a ways off for Cing too - although they are testing it in FLA. T-Mo's EDGE (2.75G) was supposed to come by the end of this year, but I guess thats horses-ass at this point too.

I dont see this REALLY hurting them - considering there arent many 3G phones out there now that offer anything worth paying for it, with the tech thats involved.

YaY! I can DL a ringtone faster than YoU!

[Graeme @ Dec 19th 2005 12:08AM]

Since Sprint and Verizon use CDMA based networks, they were always going to be first to market with high-speed data services. Whatever edge this provides them now, it remains counterbalanced by the fact that GSM still dominates worldwide. The issue is less about Sprint subscribers not being able to swap out a SIM while on vacation in Europe than it is about getting up-to-date feature phones. Remember how long it took to see a Bluetooth phone on either Sprint or Verizon?

On the purely speculative side, if WiMax or something similar turns out to be as disruptive a technology as some are predicting, being slow to rollout a data network might even play in T-Mobile's favor in the long run.

[Steve @ Dec 19th 2005 12:08AM]

I agree totally - the GREAT majority of customers in America couldn't give a rat's ass about 3G services right now. How many people know how to use Bluetooth tethering to use your phone to connect to the internet? I see a lot of people walking around with free phones and $40 plans with some text messaging. They have no interest in paying an extra $25 for data.

now if T-mobile said they couldn't make any phones with 1 mp+ cameras or mp3 ringtones, then I think the American public would be concerned. . .

[Tyler @ Dec 19th 2005 12:08AM]

The problem here is related to the problem I face - T-Mobile is not expanding or upgrading their network. I am in the fringe areas of their coverage, and T-mobile hasn't put up a new tower in 4? years. Their GPRS crawls even with full signal.
They have some good phones and plans, but I don't see a good long-range future for them.

[Juan @ Dec 19th 2005 12:08AM]

Someone please enlighten me as to how the business models for cellular carriers work. There is speculation that T-Mobile will lose customers because they will not have 3G service until 2007, and its current customers will jump ship to other carriers that have it now or will have it earlier than 2007. But why should customers stay with T-Mobile and wait? Will T-Mobile offer all of its loyal customers free 3G handests once 2007 rolls around? I think not. Instead, what T-Mobile WILL do is what all carriers are currently doing; it will offer NEW customers free or ridiculously discounted 3G handsets for switching over. Their loyal customers (those that have waited 2+ years for 3G) will have to pony up to buy a new 3G handset to remain with T-Mobile. I just dont get it... why WOULDN'T I just jump ship now? Why wait as a T-Mobile customer knowing that there is no added benefit to it?

[Permanent4 @ Dec 19th 2005 12:08AM]

Juan: Because if people stay with T-Mobile until their contract expires, they won't get slapped with $175 or so in termination fees when they switch carriers. Some people will pay that $175 to get what they want right now -- I'll probably do that myself when the GSM Treo 650 comes out -- but most people will live with their current service until the contract expires.

Big bargains are how they get you. Termination fees are how they keep you.

[HardwareLust @ Dec 19th 2005 12:08AM]

Instead of doing the research, and picking a carrier that has the coverage you need at home/work/whatever, the vast majority of americans merely read the ads and pick the coolest phone at the lowest price...and then spend the next two years bitching about the coverage. Then, when their two years are up, they repeat the process with another carrier. BTW, normal people don't give a shit about 3G. They don't have the slightest clue what it is or what it does. Ask AT&T/Cingular how many UMTS handsets have been sold since blue rolled out UMTS months ago. Then, ask them how many non-UMTS handsets have been sold in the same markets. The ratio is easily 1000 to 1. No one normal gives a crap about 3G, except a few gadget geeks (like us, yay!) and a few businessmen. This doesn't mean a thing, and certainly is not T-mobile's "obituary". The Sidekick II, Catherine Zeta Jones, and "Get More" will get them through until they pacify a few geeks in 2007.

[colin @ Dec 19th 2005 12:08AM]

O2, Vodaphone & Orange are all now selling 3G in the UK. There is little practical use for 3G on a regular handset - perhaps a Windows Mobile phone, and even better a PDA. But it looks like the real 3G success is PC Card access for business where it actually makes a different to productivity and you can be sure that the carriers are going after that primarily like they did with the XDA/MDA. My users are asking for 3G cards for their notebooks. Let's not forget 3 (three.co.uk) which seems to have failed to sell the benefits 3G since its UK availability over a year ago - but then they didn't sell a PC Card AFAIK - doh! People reported awful video calls, so it's mostly sold as regular carrier now. They also failed to provide any interoperability for cross-carrier MMS it seems and especially to Internet clients - so you need two 3 users to do anything 3G that's vaguely innovative - one day carriers will learn that they should just be a wireless ISP and stop trying to sell content or carrier-specific protocols - UMTS is supposed to carry SIP for breakfast. We should not forget that 3G means 384kbps max down if you're standing still - not that exciting really. I think WiMax will to do wireless carriers what VOIP is starting to do to landline carriers.

[daniel @ Dec 19th 2005 12:08AM]

Everyone keep in mind that data is where the carriers make a lot of their money now. There's no profit in selling buckets of minutes, which is why Sprint is happy to lease their extra capacity to MVNOs like Virgin Mobile.

The reason why 3 and AT&T Wireless have been doing so poorly is because they only offer walled gardens of content for their subscribers, and don't let people connect their phones to their laptops to use as wireless modems.

Right now most people might not see the need for 3G, but it's just like the mid-Nineties, when a lot of people couldn't see the point of ponying up for DSL, either. Now it's hard for a lot of people to imagine getting online without broadband. Eventually it'll be the same way for 3G, and T-Mobile will be at a disadvantage with its competitors. It'd be one thing if it were never going to have to spend the money on acquiring bandwidth and building out a 3G network, but they'll have to pay the piper sooner or later.

[Emily @ Dec 19th 2005 12:08AM]

Before thinking about 3G, shouldn't the phone companies do something about improving their basic voice services? How about getting rid of coverage holes in areas where they claim to have service? This is my biggest beef with mobile phone companies. I understand the limitations to the technologies, but dang it, don't tell me that I have service if the phone drops the signal every other call.

I recently switched from Sprint to T-mobile because of this. After my problems with Sprint, my expectations of cell phone companies have plummeted. Right now, I'm happy if I can reliably use my phone to make calls, and nothing more.

[JMoMo @ Dec 19th 2005 12:08AM]

This is a plus for T-Mobile, not a negative. While the other carriers are spending themselves stupid on an unprofitable technology, T-Mobile will wait until there is actual market demand for the service. I live in the U.S. U.S. citizens barely know how to use current phones -- I don't think they would know what to do with high speed protocol services. Asside from that, the costs for such services here in the U.S. are so absurd that I don't even bother looking at it.

[ed @ Dec 19th 2005 12:08AM]

There is no rush for 3g now, but if there is rapid innovation in the high speed application space for mobiles (streaming audio and video content that works well and is compelling content), they can get left behind. Papa Deutche Telecom better start forking over money for the new spectrum auction, for buys of extra sprint/nextel spectrum, and for purchases of regional providers like Dobson, Suncom, Rural cellular so they are ready to move quickly when the market takes off.

[Ernie @ Dec 19th 2005 12:08AM]

I have to agree with those posts that point out that this decision could end up being a plus for T-Mobile.

Being on the bleeding edge of technology doesn't mean that you will be poised to take advantage of that technology when critical mass finally builds for a given product. Need an example? Look at cable and DSL in the mid to late nineties - several of the big, big companies that invested heavily in network build outs and bleeding edge technology are no longer with us - anyone remember Northpoint? How about @Home?

It is one thing to offer a kick-butt product or service - it is quite another thing to develop a market for that service and then to make a steady and consistant profit on the product over the long haul.

It seems to me from a business standpoint that T-Mobile is doing exactly what it should be doing in this situation - beginning a build out of a technology (EDGE) that already has been introduced by another player and where demand for the service now justifies the investment.

EDGE was announced and tested by AT&T way back in 2000-2001, yet they have just now been able to get EDGE to about 90kbs performance consistantly across the board in most areas. Seems to me T-Mobile did the right thing - let someone else do the first roll out and let's see how it goes - learn from their mistakes, and make our rollout that much better.

Many times it is "good" to not be the biggest guy - the bigger they are, the harder they fall. Case in point - AT&T, MCI - once dominant players in the telecom industry, now both companies are being acquired and reduced to sitting on the sidelines as other companies pass them by.

As a CEO, I'd have a lot more faith in someone recommending we wait to build out a network until the demand, market and critical mass is there to justify the expense than in someone recommending a huge investment just to keep up with the Joneses.

Just my thoughts...what are yours?

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[Ongankul @ Dec 19th 2005 12:08AM]

I agree with those who say T-mobile should wait until 2007 for the market to become more available... However those who say T-mobile will learn from others mistakes are mistaken. Quoted text taken from http://www.t-mobile-international.com/CDA/about_t-mobile,2,0,,en.html?w=1568&h=967

Quote:

Global player in mobile communications.
T-Mobile International, a wholly-owned subsidiary of Deutsche Telekom, was established in December 1999. Since then, it has positioned itself as one of the largest international mobile communications carriers. It is the first to operate a trans-Atlantic mobile network based on GSM (Global System for Mobile Communications), the world�s most successful digital wireless standard. T-Mobile subsidiaries and affiliates were among the first operators worldwide to use future-oriented technologies like GPRS, UMTS (3G) and W-LAN.

[Michael @ Dec 19th 2005 12:08AM]

I think that this is sad for T-mobile, that they are not even thing about the 3G yet untill 2007. When all other wirelesses is working on it as we all speak. That mean T-Mobile will lose alot of customer, and falling behind on there technology. and I am ready to switch my service soon to the new millenium of high Tech crap.