02:44 PM

T-Mobile Hurt By Lack Of 3G

After a relatively late start, the wireless carrier is looking to participate in the booming market for 3G mobile data.

T-Mobile's sluggish rollout of 3G networks has caused it to lose subscribers, according to an executive from parent company Deutsche Telekom.

The company is the fourth-largest U.S. mobile operator in terms of subscribers, and it just began rolling out its 3G network last year. By comparison, rivals Sprint-Nextel, AT&T, and Verizon Wireless have offered 3G data services for years, and devices such as the Apple iPhone 3G have been hugely popular with consumers.

"There is no question that we lost customers because many of our customers couldn't get 3G," Deutsche Telekom's CFO Timotheus Hoettges told Bloomberg. "We now have to make sure that we can capitalize on the network in the top-10 cities where we have invested."

T-Mobile spent more than $4 billion acquiring the spectrum to deploy its 3G network in the United States, and it now covers more than 176 cities and reaches more than 121 million people. The company is heavily promoting data-hungry devices such as the myTouch 3G and the upcoming Motorola Cliq to take advantage of its 3G mobile broadband. Mobile data revenues were up 23% from last year.

But as T-Mobile ramps up its 3G rollout, its competitors are already eyeing the next generation of mobile broadband. Sprint and Clearwire already have multiple WiMax networks around the country, and Verizon is pushing to rapidly deploy 4G networks based on Long-Term Evolution (LTE) technology. AT&T is also upgrading its 3G network to HSPA 7.2 before rolling out LTE networks in 2011.

T-Mobile has not specified its 4G rollout plans, although it has indicated that LTE has a spot in its future. Executives have also said that T-Mobile will consider using HSPA+ technology to enable its 3G network to deliver up to 21 Mbps downlink speed.

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