There is a new buzz in the market that T-Mobile USA - the
fourth largest telecom carrier in the U.S. may finally offer
) unlocked version of iPhones to its subscribers.
Earlier, most of the analysts had estimated that continuous
loss of subscribers may force T-Mobile USA to team up with Apple
to sell their iPhone devices to T-Mobile subscribers from 2013
onwards. However, unavailability of 4G LTE network service
coupled with weaker cash positions has kept T-Mobile in a losing
situation. Moreover, things worsened further when
) failed to acquire T-Mobile USA.
To recoup from its current position, T-Mobile USA took some
major steps, this year. Firstly, they appointed a new CEO to help
the company meet their future goal by executing their plans
properly. Secondly, the company invested $4 billion in a bid to
upgrade its network to 4G LTE (nearly 37,000 cell sites) and most
recently, the company plans to merge with
MetroPCS Communications, Inc.
). The deal is still being considered by FCC.
Taking these factors into consideration, most of the analysts
believe that the company's latest move is intended to bring
iPhone to its portfolio, which in turn will boost its subscriber
growth going forward.
However, we believe that if these iPhones are launched at a
subsidized rate ($400 per iPhone 5) then it will put huge
pressure on margins and at the same time will affect the
company's bottom-line growth.
We maintain our long-term Neutral recommendation on AT&T
Inc. and MetroPCS.
APPLE INC (AAPL): Free Stock Analysis Report
METROPCS COMMUN (PCS): Free Stock Analysis
AT&T INC (T): Free Stock Analysis Report
To read this article on Zacks.com click here.