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T-Mobile May Get iPhone

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There is a new buzz in the market that T-Mobile USA – the fourth largest telecom carrier in the U.S. may finally offer Apple, Inc.s (AAPL - Free Report) 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 AT&T, Inc. (T - Free Report) 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.

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