By After the failed merger of AT&T and T-Mobile many were wondering what DT and their US subsidiary would do to help keep the company competitive. It appears that improving their network is near the top of their list according to a new business plan they’re preparing.
T-Mobile will apparently look to sell towers, among other things, to raise money for significant network upgrades. Their desire to keep customer cancellation down is directly tied into their network as many people tend to leave T-Mobile due to bad network performance and subpar performance compared to their rivals.
We don’t see T-Mobile completely tanking anytime soon but the general consensus was that they needed to attack their issues with a big sense of urgency. It was extremely clear before the proposal that Deutsche Telekom was unhappy with the US devision’s performance and the proposal all but confirmed that. Things don’t change overnight so we’re sure there are still a lot of problems to solve. Their ship is still above tide but it’s slowly sinking. [Reuters]
If you live in a city that excuse of bad performance is nonexistent i love t-mo
Depends on the city. Albuquerque is a (small) city. I got terrible reception and absolutely horrendous “4G” speeds downtown. Like <100kbps type of speeds on HSDPA. I stuck around as long as I could, but they lost me after a year of trouble tickets complaining of the failure to deliver.
Completely wrong, I live in suburban Los Angeles and there are an alarming number of dead spots in my area where I get no service whatsoever and a quite a few more where I’m stuck on EDGE.
As raitchison said, completely wrong. I too live in a major city, but suburban areas of the city have poor service. Some of us live in the suburbs and aren’t in downtown 24/7.
Got a yr to go til I’m out of my TMo contract. Get better data coverage or I’m outta here
Happy T-mo customer here too!
Here too! I’m glad T-Mobile is still here and we’re not ATT’s crappy network. They may have lot’s of coverage but it’s crappy slow coverage.
I only went to Verizon because my employer offers a discount with them that makes it worth my while.
Yeah love the discount and love their 4G LTE network especially here in Vegas 13 Mbps – 22 Mbps consistently. Faster than my home network.
In Chicago, I get very fast speed and consistent reliable performance. I am usually pulling 11 Mbps down.
Ya the 4G in LA is stupid fast.
I live in a smallish town and I get great signal and speeds. No complaints here.
When AT&T was trying to buy T-Mo, it was oh they are an amazing competitor with great service, etc. Now that is didn’t go through they are a sinking ship.
Wait, my internet must be broken. It sounded like you said they were going to try to IMPROVE their network by SELLING towers. Isn’t that going to have the opposite effect?
they’re improving their network by selling towers in the same way that att was improving coverage in the areas they already cover 99% by buying towers.
see, logic!
/sarcasm.
I’m sure what they will do is sell the tower and then lease space on it, they aren’t going to take their service down, it’s a purely financial move designed to make some money for upgrades in the short run.
isn’t t-mobile already getting a hefty few billion dollars from at&t… why aren’t they using that money to improve their network?
DT (The parent company) is getting the money, not T-Mobile USA. DT already said they weren’t planning on reinvesting it in the US division.
Have you ever looked at a tower there are more then one carrier on some towers. Their selling space not the tower LOL really.
Right, but the point still stands… if they’re selling their space that they USED to use for service, to someone else, they are decreasing their coverage!
Unless, as John Wentworth points out below, they are selling the space, and then they’re going to lease it back. But that kind of seems bad in the long run (they’re going to pay more over time in leasing expenses).
A more likely scenario would be them selling space on their towers to AT&T while still keeping their own equipment up as well. That way they could still use them, but they’re renting out their use to others as well, the way Verizon rents to Sprint.
Another option would be that they would sell towers to build better ones, but that seems unlikely.
Selling towers and selling space on towers are two different things, it may be short sighted and more costly in the long run, but from my read they are selling the towers themselves or they would have specified selling space on towers as they are quite different things.
I think they are willing to spend more in the long run, in order to get capital to improve their network, another benefit of selling the towers themselves is that they no longer need to manage the towers themselves, just their equipment.
If they sell the towers and then lease the space back, would that not be a tax right off?
A lot of trucking companies go this route. They don’t own any of their trucks, they just lease them and write off the cost on their taxes.
The cost of the towers, when owned by the phone company, also generates deductions for depreciation (write off). It will possibly be more costly in the long run but could be a relatively cheap source of funds for equipment improvements and expansion. There are companies which specialize in owning the towers, see American Tower. It is possible that the original costs for the actual tower have been depreciated out so that the sale will show net income.
T-Mobile is not in the real estate business. They are in the network business. Let someone else own the tower so they can focus on upgrading their equipment sitting on the tower. They’ll still be on the tower.
I guess that Pink Dress only gets a Network so far!
How about some better phones? Where the F is the Galaxy Nexus?
This doesn’t make any sense to me either other than tmobile tap dancing around the end. In Birmingham al I just pulled 6MB down on the corporate WiFi network and 10MB on 4g. I’m consistently impressed with that kind of speed. It’s a phone for crying out loud.
isn’t expanding your network the way to get better? how you get better network by selling your towers? if anything you need more!!! i am all confused here.
Once again the restaurant analogy. You’re in the business of food. Spend your time and money on the food and not owning real estate. T-Mo’s food is their network and network technology. The tower is just the real estate as they will still have access to the tower.
I love T-Mobile. Great customer service and great data speeds. But I want the galaxy nexus sooooooooooo bad. I might go to sprint when they get it.
you mean a subsidesed one, right? because the unlocked GSM one works great on T-Mobile.
You can order the international version of GNex and it will work perfectly on Tmo’s network.
Get the int’l model. If you go to Sprint it will be the biggest mistake of your life. I was with them for 8 yrs and and got tired of the crappy service and the average .17 mbps is almost a dead stop. On Tmo not only do I pay less but average about 5 mbps. My .02
I live in an edge only city…give Oklahoma better 3g coverage and maybe I’ll stick around….otherwise see ya!
Presumably they are selling them then paying rent for the use of them? In other words selling off assets for short term capital while incurring significant long term liabilities. Sounds like a solid business plan to me /sarcasm
Oh yeah I’m going to sell my car then pay rent to the buyer to keep driving it (insert crazy eyes smiley here)
Look at it in another industry. An example of not owning space is in the restaurant/retail industry. Most restaurants lease their facilities because financing the purchase of the building would tie up a lot of capital that could be used in expanding locations. Here T-Mo is selling the towers and applying that capital directly to their network equipment on the towers.
I think it would be different if T-Mobile were to look at leasing towers moving forward instead of building them (they still lease the land the towers are built on) but this is investment they have already made and are selling it off, it’s plan that’s guaranteed to cost them money in the long run.
Depending on the terms of the leases they could well end up losing access to those towers or be forced to pay MUCH more for them after the initial leases expire.
Selling towers just means they will no longer own the tower, but they will lease the space and keep antennas. If you own a tower, you must maintain the tower, and all leases to other carriers on your tower. Like owning real estate. Their coverage will not suffer. Sprint did the same thing many years ago.
I thought 2012 was about good news for Tmobile. First CRAPPY Blaze 4G then take away coverage. GREAT START TMOBILE!
You apparently aren’t a Tmobile customer. Their 4G and 3G are pretty good when you have them. Far better than ATT’s 99% coverage and slow network. I’ve tried both and where I live Tmo is pretty good.
Yeah when SPRINT get the galaxy nexus/any other ICS phone I’m jumping ship.
I’m on t-mo’s no contract plan. I get great service and signal, I mean I know the 4G I get isn’t true 4G at all, but it’s 2-3 times faster than the 3g I had before this plan.
I’ve had great service as well. I wish the no contract plans would take over and that new phone prices would come down. Seems like the economic model and pricing from oem’s count on carriers subsidizing price.
I would suggest they revamp their coverage maps. A significant discrepancy to real world, where I am located.
I do not even have T-Mobile and I know their not selling tower’s only tower space so other carrier’s can use the tower. And trust me when I say this my good friend work’s on Wireless tower’s and the company isn’t related to one company he work’s on everything from Verizon to US to Alltel and those nice little round boxes that are on towers which are for 911.
Wow. In Houston and only a family plan, so was forced to move to Sprint. I can say that with Tmo, I never went to 2G EVER while in Houston, always had reception and everything. Never missed calls, dropped calls, text messages not coming, always getting at least 5Mb (Had the G2, so that’s why so low)
I go to Sprint and I’m roaming at my house, but 1 block down I have full service. For real? Ok. And I thought dropped calls and no text messages was fake. Apparently it’s not. -_-
I actually don’t see how Tmo is bad. They’re great in ALL around Houston.
It depends on where you are really, in my town, you can drive down 1 street, and if you have T-mobile, you go from full bars, to no service, to one bar, then back to no service. Hell our highschool has zero bars everywhere on campus with T-mobile.
T-Mobile needs to get these:
Galaxy Nexus
Galaxy Note
Otherwise, the Galaxy Note on AT&T is looking nice and the Galaxy Nexus on Sprint and Verizon too.
I’m done with them and I’m glad. I had service with them for about seven months when I brought my girlfriend over into a new family plan I didn’t realize (read: they didn’t tell me) that I was putting BOTH lines into a new 2 year contract. I got hit with a $700 final bill when I canceled in Nov… Fuckers. What a bullshit policy.
No complaint in Tulsa Ok great 4g speeds.
No problems here save for the buggy G2X. March will make me 10 years with T-mobile. Before then I was with sprint for a year. since then I have witnessed constant service and coverage improvements. Just because my G2X was bugging out and too many people having warranty exchanges, I just bought a Galaxy S II. I am very happy with the 4G speeds I am getting. So far I am getting 12.73mbps. never a dropped call and nkw since there is service in some subway stations and the savings I am getting, I will be sticking around.
I loved T-Mobile and never had any problems in the 5 years I was with them. The only reason I switched was to save money with virgin mobile.
The original article was not very accurate. T-Mobile is not just selling their towers. T-Mobile offered their towers to investors for a sale-leaseback. This is a very common, time-honored practice in business. The alternative is to borrow against the asset, but lenders do not lend 100% of the value, so a sale-leaseback raises more capital.
Most major corporations owe billions to banks and investors. In business you borrow money if you have a business plan that requires the capital, where the business plan will earn more money than the interest cost on the borrowed money. Earning profits on someone else’s capital is not a bad thing.
One additional observation: This is old news. T-Mobile offered their towers for sale-leaseback on Wall Street nearly a year ago, before the AT&T merger deal was even agreed to.
Also, this is the second time that I have seen Phandroid use yellow journalism to diss T-Mobile. The first was half a year ago when Phandroid announced that T-Mobile had lost 500,000 customers the previous quarter. In fact, they did lose 500,000, but they gained 402,000. No mention of the 402,000 in the Phandroid article, leading the reader to conclude that T-Mobile was sliding downhill fast. I’m tired of this kind of journalism here. It’s OK with me if you don’t like T-Mobile, but stop with the half-truths and scare stuff. Phandroid’s credibility with me is now about the same level as the credibility of my local politicians.
Its, funny how fans will get on you…often when you talk about T-Mobiles poor spotty coverage, even after such articles such as this state so…iwish T-Mobile would just sell portions of their towers to some of the remaining towers.
…remaining cariers.
What happened to the 4 billion that all the tmo customers said would last them for years after the att merger failed. I’m a realist, what I see happening is a sell off of assets in order to get as much money as possible before they close shop. If it’s known that your going out of business your assets aren’t worth nearly as much as they were before it was known that you were going out of business.
This is the start of the liquidation. This is why you don’t hear about tmo announcing devices like the nexus and the note. This is why they are the only player without an iPhone, think about it and it might start making sense.
Just my opinion, the att merger is the only thing that would have saved them. It’s really sad to see all the jobs that are going to be lost.
Wow, could this article possibly be any more poorly researched?
hopefully T-Mobile can get up again and not totally lose their business.
Looks like Quentyn is drinking Kevin Krause’s kool-aid. Please explain the article as it is presented, not some opportunity to bash T-Mobile. But then again. You guys are bloggers not journalists. So it is to be expected.
Yeah.. If you read the source article.. It says “may”.. and the T Mobile guy says “looking into it”.. so of course that should have a headline here of “finalizes business plan”… and all the sinking ship crap.. whatever.
I switched to t-mobile from verizon because tmobile happens to have better coverage than verizon where I live and where I work. I also like to support the underdog when I can.
Any time I’ve really needed coverage (like to get a number of a business I can’t find, navigation, etc) it seems like my TMo phone suddenly loses any data capabilities and usually has no bars. They better start doing more than talking real soon.
Yeah, the story is poorly written, but I really like T-Mobile. I have recently switched from Verizon and am saving a bunch of money. I am getting very respectable data speeds 5-6 mbps in Dallas/Ft. Worth and according to the “speed test” app, it is has gotten faster since I first started with them only a few months ago.