UPDATE 4-T-Mobile USA eyes growth from iPhone, marketing changes

Tue Mar 26, 2013 6:22pm EDT
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By Sinead Carew

NEW YORK, March 26 (Reuters) - T-Mobile USA said on Tuesday that it will start selling Apple Inc's iPhone on April 12, making it the last of the big national U.S. operators to sell the popular smartphone.

The No. 4 U.S. mobile provider, which is seeking to merge with smaller rival MetroPCS Communications, is hoping the device can help stem customer losses. The launch follows a marketing overhaul that eliminates device subsidies and two-year service contracts favored by its bigger rivals.

T-Mobile, a unit of Deutsche Telekom AG, hopes its new approach will differentiate it from bigger rivals that already sell the iPhone: Sprint Nextel, AT&T Inc and Verizon Wireless, a venture of Verizon Communications and Vodafone Group Plc.

The company, which struggles with customer defections, hopes to attract cost-conscious consumers through an aggressive marketing campaign that focuses on its lack of service contracts and clearly outlines the monthly cost to consumers to own devices such as the iPhone.

U.S. operators have traditionally subsidized phones in exchange for tying customers into contracts but do not disclose how much of their monthly charges covers the device, a practice that T-Mobile USA criticized as lacking transparency.

"The industry's broken," T-Mobile Chief Executive John Legere said at a press event to announce the iPhone launch and discuss the service plans, which he promised late last year.

In particular, T-Mobile USA is taking aim at No. 2 U.S. operator AT&T because the two companies use the same network technology, making it easier for consumers to bring their AT&T phones to T-Mobile's network.   Continued...