Was the iPhone the Reason Why Deutsche Telekom Sold T-Mobile USA?

Was the iPhone the reason why Deutsche Telekom decided to get rid of T-Mobile USA, and sold it to at&t? According to an article published by the New-York Times earlier today, it would appear so. Until Apple introduced the iPhone back in 2007, T-Mobile USA was a profitable company, and was a sizable wireless provider: at the time, at&t and Verizon had a little over 50 million subscribers each, while T-Mobile had almost 30 million. T-Mobile showed significant growth, thanks to innovative – and exclusive – devices such as the Sidekick, and many analysts expected the company to eventually catch up with the ‘big players’, namely Sprint, Verizon and at&t. However, once the iPhone went on sale, T-Mobile USA’s situation started to unravel, as a large chunk of its customers left its network, and switched to at&t. To add insult to injury, the vast majority of the subscribers who switched were high revenue subscribers, able to afford the higher monthly fees commanded by the iPhone. As a result, T-Mobile USA saw its subscriber base change dramatically. Despite T-Mobile’s ‘anti-iPhone’ ad campaign, behind the scene, the company has been trying to convince Apple to bring to iPhone to its network for years. But between the at&t iPhone exclusivity, and the fact that the iPhone was never built to support all the frequency bands used by T-Mobile in the U.S., negotiations never went anywhere. As a result, T-Mobile USA was forced to adapt its strategy, and had no choice but to focus on subscribers with less expandable funds. Unsurprisingly, the company’s profits started to shrink significantly, and without the iPhone to turn things around, the German Deutsche Telekom, T-Mobile USA’s parent company, had very little choice but to sell its U.S. branch. Now that T-Mobile USA is out of the picture, the only large wireless provider that does not carry the iPhone in the U.S. (yet) is Sprint – time for the Kansas City based company to heavily lobby Apple, otherwise it may end up just like T-Mobile, gobbled up by a much larger competitor such as Verizon.