I mentioned earlier this week that T-Mobile USA customers will still have WiFi access in Starbucks coffee shops due to a WiFi roaming agreement between T-Mobile and AT&T Wireless. Then, I learned that this agreement ends after 5 years (early 2013). It is possible they could renew their agreement at that point in time. But, it is also possible that AT&T could wave goodbye to T-Mobile at that point. So, T-Mobile’s hotspot service will be limited to Kinko’s/FedEx locations, some hotels, and and airports. Not real useful even at only $20/month.
Then, I read over on Brighthand that T-Mobile USA is finally getting around to rolling out a 3G network later this year (or so they claim). But, there’s a wrinkle to this promise too… T-Mobile’s 3G is neither animal (UTMS) nor vegetable (HSDPA). This means that we can’t just take an unlocked 3G phone and use it with T-Mobile.
This bad news is not limited to T-Mobile IMHO. This is also bad news for Microsoft. Why? I If T-Mobile becomes seen as an backwater mobile phone service, it will make it easier for its customer base to abandon it for AT&T Wireless to get widely available WiFi hotspot and 3G service. It also makes it really easy for people to decide to dump Windows Mobile and get an iPhone (or Google Android for that matter).
Microsoft should think about investing in a nationwide hotspot provider and having it shore up T-Mobile’s WiFi coverage to help T-Mobile keep their WiMo customers happy.
Comments
2 responses to “Is T-Mobile USA Going to Survive? Should Microsoft Help Them Stay Relevant?”
Frank: One problem is that we don’t know what the growth segments are for T-Mobile (which has shown growth compared to, say, Sprint PCS’ subscriber decline). But, here’s my guess. Up until now, T-Mobile’s growth has NOT come from the smartphone crowd, but its subscriber retention HAS come from Starbucks hotspot users. Going forward, however, my guess is that the combination of the iPhone and Starbucks’ switch to AT&T Wireless’ hotspot changes this equation. In other words, my guess is that that basic phone market is at or near saturation while the smartphone market is in a growth cycle propelled by the iPhone’s success. If these assumptions are correct, the prediction is that we should see T-Mobile’s growth halt because basic phone users would stay while new smartphone buyers go elsewhere. T-Mobile data users will probably stay for 2 to 3 years while the Starbucks Hotspot roaming is still in effect. But, their smartphone/notebook hotspot user subscriber base should start shrinking in years 4 and 5 (2011 and 2012) just before the roaming agreement ends. If T-Mobile’s growth shows flattening in the next 4 to 6 quarters, it would be an indication that this prediction will play out as described. T-Mobile has not shown any innovation in the last couple of years except for dropping there combo EDGE/hotspot price to $20/month for voice subscribers. So, they may not have any cards to play except for their non-standard 3G offering later this year. Of course, these are all just guesses. We’ll just have to wait and see how things play out.
But if 3G is available everywhere at a reasonable price, what’s the point of wifi for public access? Even though T-Mo doesn’t have 3G they are growing, which I think shows that price still matters.