T-Mobile USA blames iPhone 4S for huge customer defections in holiday quarter, says 4G LTE coming in 2013

9to5 Staff | Feb 23 2012 - 4:40 am PT

The nation’s fourth-largest wireless carrier T-Mobile USA just reported it lost 802,000 contract customers during the holiday quarter, causing revenues to dip 3.3-percent to $20.6 billion. For comparison, the company reported 186,000 net contract customer losses in the third quarter of 2011 and 251,000 in the year-ago quarter. The Deutsche Telekom-owned carrier put the blame for such a huge decline in customers and mindshare on Apple’s iPhone 4S that bypassed T-Mobile to launch last October on AT&T, Verizon Wireless, Sprint and regional carriers C Spire Wireless and Claro Puerto Rico, the largest Puerto Rican telecommunications services company.

A statement from Deutsche Telekom said:

For T-Mobile USA, the past year was characterized by significant challenges, particularly in the fourth quarter, following the market launch of the new Apple iPhone model by the three major national competitors in October. […] However, not carrying the iPhone led to a significant increase in contract deactivations in the fourth quarter of 2011. […] Sequentially, the decline in branded net contract customers was driven primarily by higher branded contract deactivations as a result of the launch of the iPhone 4S by three nationwide competitors in mid-October.

The Bellevue, Wash.-headquartered firm contemplated for far too long whether to invest big bucks into 4G LTE deployment, and it clung to a hopeful merger with AT&T to solve its capital investment issues. With that deal off the table now, the company is promising to launch 4G LTE service sometime next year, tapping $1.4 billion of its own investment, re-farmed frequencies, and extra spectrum acquired from AT&T.

The carrier offers more than a million iPhone users on its network some support that includes Micro-SIM cards for iPhone 4. Interestingly, unlocked iPhone 4S devices work in some T-Mobile USA’s network pockets, because the phone uses the carrier’s HSPA+ 1900MHz spectrum. As AT&T’s planned merger with T-Mobile USA fell apart, there was some talk about the latter theoretically using resources and spectrum gained from the failed merger to become iPhone-compatible.