iPhone-Related Customer Churn an 'Area of Concern' for T-Mobile USA

As highlighted by AllThingsD, T-Mobile USA acknowledged yesterday in discussion of its third quarter earnings that the lack of an iPhone 4S offering for the carrier may have an impact on customer retention, labeling churn rates as an "area of concern".

“Earnings improved as we continued to focus on making smartphones affordable to all Americans through our unlimited Value plans, improvements to our 4G network, and an expanding portfolio of 4G devices,” T-Mobile USA CEO Philipp Humm said in a statement. “Discipline on the cost side contributed to year-on- year margin improvement, while postpay churn, in particular related to the iPhone 4S launches by competitors, will continue to be an area of concern.”

With Sprint adding the iPhone last month, T-Mobile is the last of the four major U.S. carriers to not offer the device, putting it at a significant disadvantage due to the iPhone's popularity. T-Mobile USA has issued several public statements about its lack of an iPhone offering, acknowledging that the decision on a T-Mobile iPhone is up to Apple while touting other smartphone devices it does carry.

The iPhone's absence on T-Mobile is due in large part to the carrier's network technology, which while being the same GSM standard used in the rest of the world, runs on different frequency bands from most other GSM carriers. Consequently, Apple would have to develop modified hardware to support T-Mobile's network, something the company has so far declined to do on more than a prototype basis.

Also likely affecting Apple's plans are questions over the long-term fate of T-Mobile, as AT&T is currently in the process of trying to acquire the carrier. Should the acquisition be approved, AT&T would in time merge the networks of the two carriers and with the move to LTE, a separate iPhone supporting T-Mobile USA's current standards would eventually become unnecessary.