T-Mobile USA targeting No. 3 [telecom]

T-Mobile USA Inc. (DTEGY) is looking to put its recent tumultuous past behind it and move aggressively forward with ambitious plans to jump past current rival Sprint Nextel Corp. as the nation's third largest operator.

During an investor conference today in New York City, T-Mobile USA set out long-term goals that will see the carrier increase revenues, save money and grow its customer base. The carrier wants to increase annual revenues by $3 billion over the next three years while at the same time reducing operating costs by $1 billion per year by 2013. In addition, the carrier is looking to jumpstart its customer growth across all market segments in hopes of becoming a solid No. 3 in the market.

The carrier said its revenue growth plans would come from its aptly-named "Grow" program where the carrier plans to reinvigorate its position as providing customers with the greatest value in mobile data and smart phone services. Much of that growth will be based on the carrier's controversially named "4G" network that T-Mobile USA said in combination with new data plans and smart phones would allow the carrier to grow service revenues that have stagnated over the past couple of years.

As for its network operations, T-Mobile USA said it was moving aggressively to upgrade its current HSPA+ network with technology to allow for theoretical download speeds of up to 42 megabits per second. The carrier noted the upgrade would allow the carrier to provide network speeds comparable with the latest LTE networks currently being deployed.

In support of those network plans, T-Mobile USA noted that it was beginning to look at refarming possibilities for its legacy 1.9 GHz spectrum assets that are currently being used to support its GSM/GPRS/EDGE network to, in turn, help bolster the 1.7/2.1 GHz spectrum being used for its HSPA+ offering. The carrier said that with almost one-third of its customer base having moved over to devices using its HSPA+ network it was looking to start transitioning some of those spectrum assets beginning in the 2012 time frame. T-Mobile USA added that it would also stop selling 2G only devices.

The carrier also plans to begin rolling out HSPA+ smart phones at price points "well below" $100 this summer as well as plans to bring back an Android-based Sidekick-branded device.

While T-Mobile USA's management went out of its way to point out that it had sufficient spectrum headroom to support both the technology upgrades and growth, it was also continuing to look at alternatives for acquiring new spectrum or partnering with other operators to offer true 4G services.

Deutsche Telekom is exploring various options to acquire additional spectrum and reduce the gap regarding economies of scale compared with its larger competitors, including partnering with other companies, the company noted in a statement.

Those options include upcoming spectrum auctions for both the 700 MHz D-Block licenses as well as 1.7/2.1 MHz auctions. In addition, T-Mobile USA continues to be linked with potential network partners Clearwire Corp. and LightSquared.

At a macro level, T-Mobile USA said it plans to increase the coverage of its network to 290 million potential customers covered through a combination of macro and micro technologies. At a macro level the carrier said it would increase the overall scale of its network by adding nearly 5,000 new cell sites and the addition of more efficient radio head technologies. These new cell sites and updated towers would allow the carrier to cut down on roaming charges that it currently pays to its rivals.

To help support the deployment of high-speed data services, T-Mobile USA said it plans to have fiber backhaul running to 87% of its HSPA+ towers by the third quarter of this year.

At a micro level, the carrier said it would begin working on distributed antenna system and in-building technologies as well as bolster its Wi-Fi initiatives for consumers. That Wi-Fi bolstering will include a greater number of devices that can seamlessly switch between cellular and local area wireless networks, an easier user interface and by including free usage of services for consumers using a Wi-Fi connection.

As for growing its customer base T-Mobile USA said it would continue to focus on customer service areas in an attempt to help cut down on customer churn. The carrier noted that throughout the past year, postpaid churn remained well above the 2% level and that it plans to cut that to below that mark to help turn around its lumpy customer growth results.

The carrier is also planning to continue its aggressive advertising campaign targeting its network advantages compared with its larger rivals AT&T Mobility and Verizon Wireless in an attempt to win mind share from consumers.


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