T-Mobile falling behind in data race

“Don’t forget that T-Mobile is a consumer play, and they do not court enterprises as much,” Ho said. One of the key data drivers, data cards, target businesses, while T-Mobile’s customer base is primarily consumer-driven. The big three operators also have spent years establishing data services that encompass far more than Internet access plans, including navigation, music and streaming video. T-Mobile doesn’t just need a 3G network but a content and services platform to drive incremental revenue, Ho said.

T-Mobile gets that service platform in part with the launch of G1 last month. The first Android device comes with a host of Google services working over the 3G network as well as an open development platform that could generate thousands of new applications. The device didn’t go on sale until after the turn of the quarter, so none of its data revenue appeared in T-Mobile’s Q3 earnings. But the device could challenge the iconic iPhone in Q4, which could substantially boost T-Mobile’s data revenue in coming quarters. Each G1 activation requires a data subscription between $25 and $35 a month. If T-Mobile is going to catch up to megacarriers, it will most likely be with those types of tech-savvy consumers whom the G1 targets, Ho said.

“T-Mobile is trying to build out that 3G network as fast as they can, and indeed data subscriptions are a key component for growth,” Ho said. “Witness the required data plan for the G1. That locks in data revenue for 1 or 2--most likely 2--years. “