Oct 6, 2006 12:53 PM,

T-Mobile: $4.2 billion spent, $2.6 billion to come

By Dan O'Shea

Officials from Deutsche Telekom and its subsidiaries, T-Mobile International and T-Mobile USA, gathered in New York City this morning to provide an update on how the entire corporation is positioned in the U.S. market following the recent Advanced Wireless Services spectrum auction, in which T-Mobile USA was the leading bidder and license winner.

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Executives didn’t offer too many specifics on T-Mobile USA’s 3G network rollout, which is scheduled to begin in the fourth quarter this year, but said an additional $2.6 billion or so will be spent over the next three years on 3G in the U.S., on top of the $4.2 billion already committed to new licenses. The officials also had to dance around questions concerning the potential sale of the U.S. operation. However, they reiterated the company’s commitment to U.S. market.

“The U.S. mobile communications business continues to be a very attractive market for us,” said DT Chairman Kai-Uwe Ricke, who described T-Mobile USA’s market penetration as being around 73% and growing. “Thanks to the newly acquired spectrum from Auction 66, we now have an even more solid basis on which to build further growth in the U.S. It was money well spent.”

T-Mobile USA bid about $4.2 billion for 120 licenses in multiple regions, more than doubling its average frequency coverage in the top 100 U.S. markets from 25.9 MHz to 52.2 MHz.

The U.S. operator is now ready to begin its long-awaited migration to UMTS/HSDPA technology, a project that T-Mobile USA CEO Robert Dotson said will be better off for the carrier having waited longer than some of its competitors to make the 3G transition. “Both deployment plans and technology have had the time to mature,” which means better reliability and lower cost to deploy 3G over the same footprint, he said, though he added later that 3G’s time has definitely come. “We’ve been sucking the life out of GSM. I don’t think anyone has sucked the life out of GSM better than we have.”

T-Mobile USA’s 3G service launch likely will begin around mid-2007, Dotson said, adding that further details will remain undisclosed for now for competitive reasons.