T-Mobile Talks About Its Future

In an industry where consolidation appears to be more of the norm these days, don't expect T-Mobile USA to join the fray any time soon. That's according to company head Robert Dotson, who also told journalists that 3G network capabilities will come to the wireless carrier in 2007.

The service, which has been left in fourth place by a wide margin following a rash of mergers, says it doesn't mind trailing its competitors. T-Mobile International's CEO Rene Obermann told Reuters that he thought "the fourth rank is a good position," and reminded that out of all the carriers, T-Mobile still has the largest purchasing power due to the fact it is part of the biggest mobile carrier in the world.

While it may not be interesting in merging with a regional carrier anytime soon, T-Mobile is growing quickly on its own. The company has posted impressive subscriber growth numbers since it tied the knot with Deustche Telekom in 2003.

In nearly every quarter since then, T-Mobile USA has added a million new subscribers - and it forecasts that pace to continue during 2005. In fact, during 2004 it matched or beat numbers from Verizon Wireless, a carrier more than twice its size.

"We are a growth machine. We have to grow, grow, grow," Dotson said. "I believe we can keep up this speed of growth." T-Mobile USA plans to focus on subscribers who are increasingly giving up their landline phones in favor of mobility, which it says 10 to 15 percent of its subscriber base have already done, according to internal studies.

At the time of its merger with Deustche Telekom, many questioned why the then debt-laden company took such a huge risk. The merger cost DT $40 million, and during the height of the worldwide economic downturn in 2002, T-Mobile USA became a target of speculation that it may be spun off in order to pay down debt.

However, now the wireless carrier is one of the biggest growth engines in the company, with revenues higher than its German counterpart that has long been the main soruce of revenue. In the next ten years, DT expects T-Mobile USA to be 43 percent of its wireless revenue, larger than any of its other wireless ventures.

Aside from its forecasts of growth, T-Mobile promised 3G would be coming soon; the rollout should begin in late 2006, with services beginning in 2007. However, the company said it had not yet approved bidding for the bandwidth needed, which will likely be acquired through auction early next year.

According to the company, T-Mobile USA will spend $2.75 billion this year to build out its network and enter new markets.