An internal T-Mobile screenshot leaked to TMoNews states that the iOS update will not only authorize the T-Mobile network (T-Mo’s 2G and a portion of its HSPA+ networks are already supported), but will enable Apple’s visual voicemail and MMS features on the carrier as well. Here’s the text of document:

“The T-Mobile Carrier Update is a minor iOS software update that enables official iPhone support by T-Mobile. When installed, the software update enables a handful of capabilities like Visual Voicemail, MMS Settings and Network/Device optimizations that customers do not have access to today. On April 5, the software update will begin being pushed via OTA to all iPhone devices on the T-Mobile network with iOS 6.1.x or higher.”

I asked Apple and was told it isn’t commenting on a rumor, so I suppose we’ll have to wait until Friday to see if an iOS update shows up in iTunes.

Keep in mind that only the North American GSM iPhone 5 model will work on T-Mobile’s LTE systems, which are now live in seven markets, and to connect to T-Mo you must have an unlocked device. All generations of iPhones will work in T-Mobile’s 2G footprint and on its HSPA+ networks in about 50 markets today. The carrier is expanding that HSPA+ support quickly as it undergoes a major network overhaul.

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Coupled with the markets T-Mobile has already upgraded, it has a new HSPA+ network running in the PCS 1900 MHz in 37 cities, including many of the country’s largest. T-Mobile isn’t updating its coverage figure for the overhauled network, but these new markets will add considerable numbers to its last count of 100 million people covered.

T-Mobile will begin selling the iPhone sometime next year, but in the interim it has been trying to lure customers with unlocked iPhones over to its network. Its biggest obstacle, however, was the fact that its old network configuration could only supply the iPhone with 2G speeds. By relocating its HSPA+ from the Advanced Wireless Service (AWS) to the PCS band, it can now link to the iPhone’s 3G radios, but T-Mobile also clears up space for its LTE launch next year.

Update: Interestingly enough, T-Mobile customers won’t be the only ones benefiting from this upgrade. T-Mobile mobile virtual network operator Solavei said it would take advantage of its wholesaler’s reconfigured network to support the iPhone as well. Like T-Mobile it won’t sell the iPhone, but it will sell a micro or nano-SIM that fits into an unlocked iPhone and allows customers to take advantage of its $49 unlimited voice, text and data plans. Other MVNOs like Straight Talk already offer similar iPhone SIM activations, though they work mainly on AT&T’s HSPA network. Now that the reconfiguration is well underway, expect more MVNOs to start offering iPhone support over the T-Mobile network soon.

Here is the full description of the new upgraded markets from T-Mobile’s blog:

• New York, including The Bronx, Brooklyn, Manhattan, Queens and Staten Island
• Newark, N.J., including the surrounding cities of East Orange, Elizabeth, Jersey City, North Bergen, Paterson and Union City
• Boston and Cambridge, Mass., including the surrounding cities of Amherst, Andover, Arlington, Bedford, Belmont, Billerica, Braintree, Brockton, Brookline, Burlington, Canton, Chelmsford, Chelsea, Chicopee, Dedham, Everett, Framingham, Hadley, Holbrook, Holyoke, Lawrence, Lexington, Lowell, Ludlow, Lynn, Malden, Marblehead, Medford, Melrose, Metheun, Milton, Nahant, Natick, Needham, Newton, Quincy, Reading, Revere, Salem, Saugus, Sommerville, Stoneham, Swampscott, Tewksbury, Wakefield, Walpole, Waltham, Watertown, Weston, Westwood, Weymouth, Wilmington, Winchester, Winthrop and Woburn
• Springfield, Mass.
• Providence, R.I., including the surrounding cities of Cranston, North Providence, Pawtucket and Warren
• Philadelphia
• Detroit and Warren, Mich., including the surrounding cities of Dearborn, Romulus, Royal Oak, Sterling Heights and Troy
• Dallas, including the surrounding cities of Arlington, Carrolton, The Colony, Denton, Farmers Branch, Flower Mound, Frisco, Garland, Grand Prairie, Irving, Lancaster, Lewisville, McKinney, Mesquite, Plano, Richardson, Rowlett and Southlake
• Fort Worth, Texas, including the surrounding cities of Keller and Mansfield
• Austin, Texas including the surrounding city of Round Rock
• San Antonio
• Tampa, Fla., including the surrounding cities of Clearwater, Largo, Safety Harbor, St. Petersburg and Vinoy Park

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Today’s launch in Chicago; Reno, Nev.; Fresno and Sacramento, Calif.; and the region surrounding Los Angeles (though not in LA itself) – coupled with activations on Monday in Atlanta, Seattle and Minneapolis – bring its total upgraded footprint to 23 markets covering more than 100 million people. While T-Mobile doesn’t sell the device yet, customers with unlocked iPhones can use them on the carrier’s network. But only in areas where the upgrade is complete will they get anything beyond a 2G connection.

Though in the rest of country the network officially hasn’t seen the upgrade – which will move a portion of T-Mo’s HSPA+ network to the 1900 MHz PCS band – customers with unlocked iPhones have reported seeing HSPA+ signals from New York to LA, cities where their Apple devices would normally be restricted to pokey 2G speeds. Right up to its launch this week, Chicago was a hotbed of signal sightings so T-Mobile obviously has many more markets in the works.

T-Mobile is rushing to complete its network reconfiguration for a number of reasons. Not only will it be fully compatible with the iPhone’s 2G and 3G radios when it starts selling the device next year, but the sooner it relocates HSPA+ to the PCS band, the sooner it can start building its new LTE network.

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“T-Mobile has entered into an agreement with Apple to bring products to market together next year. Additional details will be made available at a later date,” a T-Mobile spokesman said in a statement.

Update: T-Mobile CEO John Legere has confirmed that the iPhone will be among those Apple devices.

That lines up exactly with what we’ve been saying for the last year. T-Mobile’s network isn’t yet ready to support the iPhone or iPad yet, but it will be in the near future when T-Mo completes its network overhaul. And once that overhaul is complete, Apple will jump at the chance. T-Mobile may be the smallest nationwide operator in the U.S. but it still has a customer base larger than population of most countries.

The big question is how far along in its overhaul T-Mobile will be before the Apple deigns it iPhone ready. In the next six months T-Mobile will likely complete the reconfiguration of HSPA+ on the 1900 MHz PCS band, which will make its 3G network iPhone compatible nationwide (today only its 2G service works on the iPhone). Or Apple may want to wait for T-Mobile’s LTE network, which the carrier plans to launch in the latter half of 2013. If Apple does wait for LTE, that almost certainly means T-Mobile will have to wait for the next generation of iOS devices, whatever they may be.

Either way, once T-Mobile is done with its network upgrades, all generations of the iPhone and iPad will be optimized for its networks, leaving no obstacle for a long and fruitful Apple-T-Mobile relationship.

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T-Mobile’s networks simply aren’t ready yet. The reason T-Mobile has been left off the iPhone bandwagon for so long is that its HSPA networks don’t support the PCS 3G bands the iPhone uses. T-Mobile is fixing that issue, moving its network down the electromagnetic spectrum as part of a nationwide overhaul.

T-Mobile, however, has officially completed that upgrade in only 15 cities. If the iPhone were to go live next week, the vast majority of T-Mobile’s customers who bought it would experience only 2G speeds. That’s to say nothing of the iPhone 5’s LTE capabilities, which T-Mobile won’t support until the second half of 2013. Considering the iPhone is first and foremost a mobile data device, I don’t think even Apple is willing to unleash it on a network that can perform only a fraction of the data functions it was designed for.

Neville Ray, CTO, T-Mobile (c) 2012 Pinar Ozger pinar@pinarozger.com

That said, T-Mobile is aggressively completing its network overhaul, and it has been inviting customers with unlocked iPhones to sign up for SIM-card service. Readers have reported receiving T-Mobile PCS HSPA+ signals all over the country, especially in big metro markets like New York City and Chicago. T-Mo CTO Neville Ray has promised a “material” portion of its footprint will be iPhone-ready by the end of the year.

Make no mistake: the iPhone is bound for T-Mobile. It’s just a question of technology and timing. But unless Ray can somehow complete his nationwide overhaul in the next few weeks, the timing just isn’t right. Logistically that seems impossible, even for network miracle-worker like Ray. In recent weeks, T-Mobile has even tried to distance itself from Apple, claiming the iPhone isn’t necessarily worth the sacrifices.

Who knows? Maybe we’ll hear something from Apple next week about a T-Mobile iPhone, maybe even a commitment to partner with T-Mobile sometime in the future. One of the new iPhone-ready markets T-Mobile announced last week was Apple’s hometown of Cupertino, Calif. You can’t argue with that symbolism. But I wouldn’t hold my breath on getting a magenta iPhone by Christmas.

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KC is only the second city T-Mobile has officially announced as upgraded – Las Vegas was the first – but there has been a lot of activity going on behind the scenes since T-Mo started this process in the summer. Website Airportal.de is keeping a tally of HSPA+ sightings in T-Mobile’s PCS frequencies. The submissions are all unverified, but the map shows activity in dozens of cities from Boston to Los Angeles.

T-Mobile isn’t selling the iPhone, of course, but the carrier has always aggressively recruited iPhone owners to its SIM-card plans. T-Mobile claims to have more than 1 million customers on such bring-your-own-iPhone plans. The problem was, until now, it wasn’t able to offer those customers anything beyond 2G data speeds due to the incompatibility of the iPhone’s 3G radios with the T-Mobile network. With the network overhaul, that all changes.

T-Mobile expects to complete the relocation of its HSPA+ network – which T-Mobile refers to as 4G – in its entire 229-market footprint by mid-2013. After that it will build an LTE network in the spectrum HSPA+ vacated. At that point, T-Mobile also hopes to have closed its merger with MetroPCS, which will give its sizable hunks of new 4G bandwidth in key cities like New York and San Francisco. By the time the overhaul is complete in 2014, T-Mobile’s networks will by in synch with those of the other major North American operators, and hopefully that spells the end of T-Mobile’s long incompatibility with Apple devices.

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“We are giving a decade worth of pre-warning,” Khurjekar told Fierce. But even 2021 may be too soon. A Verizon Wireless spokesperson clarified with Fierce that that 2021 is the year to which Verizon is committing to keep its 2G and 3G online so its enterprise and M2M customers can make long-term plans. Verizon has set no firm timeline for shuttering its CDMA network at all, and will continue to offer 2G and 3G as long as it customers want it.

Verizon’s 2G/3G coverage is in red. Its LTE markets are in yellow.

The rest of the mobile industry sees a bit more urgency. AT&T has said it would shut down its 2G network by 2017. It’s already started repurposing old GSM spectrum for HSPA, and there are signs that it is considering a LTE launch in its 2G cellular and PCS frequencies as well. Sprint is finally shutting down Nextel’s old 2G network, refarming its frequencies for 4G. Meanwhile, T-Mobile has lopped off most of its GSM capacity to clear room for more HSPA+ and a new LTE service.

Why isn’t Verizon in a hurry to cannibalize its older technologies as well? For one, Verizon is in the best 4G LTE position of all of the Big 4 operators. After scooping up a bunch of 4G licenses from the cable companies, Big Red has the airwaves to launch a new nationwide LTE network parallel to the one its already deployed.

Also, even if Verizon doesn’t shut down 2G and 3G sites for another nine years, there’s nothing stopping it from whittling away at them. Verizon’s CDMA 1X and EV-DO technologies can persist on very little bandwidth, meaning Verizon could keep nationwide 2G and 3G networks with only a handful of megahertz. It could then take the rest of its cellular and PCS spectrum and put it to 4G use.

Verizon will have to keep a modicum of CDMA online for the foreseeable future though. In 10 years our handsets and tablets will have fully completed the jump to 4G, but there will still be CDMA radios embedded in cars, shipping containers, industrial equipment and even vending machines and jukeboxes, all of which will need a network to link to. Verizon will want to keep those lucrative revenues coming.

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The iPhone 5 requires T-Mobile to support two common frequency configurations: 3G in the 1900 MHz PCS band and LTE in the 1700 MHz/2100 MHz Advanced Wireless Service (AWS) band. T-Mobile has neither today, but it will meet the first requirement shortly as it completes the relocation of its HSPA+ network this and early next year. As for LTE, T-Mobile won’t have a commercial network ready until the second half of 2013 and even then it won’t have a sizable LTE footprint until 2014. That’s where MetroPCS comes in.

MetroPCS has a live LTE network in 14 cities, and for the most part it’s running on the same AWS frequencies already supported in the AT&T/Canadian variant of the iPhone 5. T-Mobile CEO John Legere said on Wednesday that as soon as the merger closes, as expected in the first half of 2012 2013, the combined carrier will have dual-mode devices supporting T-Mo’s HSPA network and Metro’s LTE network ready to go. One of those devices might just be the iPhone 5.

Of course, T-Mobile and MetroPCS aren’t saying any of this out loud. It’s best not to test the Apple gods, and there’s certainly no guarantee that the companies will be able to strike an immediate distribution deal with Cupertino. But T-Mobile is already servicing more than a million iPhones on its 2G network and will ramp up its efforts to lure in even more unlocked iPhone owners as soon as it can fully support the device’s 3G capabilities.

T-Mobile may have to continue that bring-your-own-iPhone strategy for another year, but if all goes according to plan, by next spring it will have a fully Apple-compatible network in some of the country’s biggest markets, including New York City, San Francisco, Philadelphia, Las Vegas, Dallas and Boston. There are still a lot of obstacles T-Mobile and MetroPCS need to overcome to make this merger work, but at least the iPhone won’t be one of them.

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T-Mobile has been overhauling its network, realigning them with the 3G bands supported on most North American GSM phones, while simultaneously clearing frequencies for its future LTE network. T-Mobile has already revealed that it has converted over thousands of cell sites in New York City, Seattle and Las Vegas and many of T-Mobile’s current customers using unlocked iPhones have already encountered big boosts in speeds on a site by site basis.

But Ray said Friday that the spectrum refarming process is now 75 percent complete in Vegas, providing the consistency of coverage necessary to let start marketing HSPA+ to potential iPhone users. Until now, any iPhone on T-Mobile’s network was limited to 2G EDGE speeds.

Older generations of the iPhone won’t be able to access the full bandwidth of T-Mobile’s dual-carrier HSPA+ network, which can support theoretical speeds of 42 Mbps — though they will still get 3G connectivity — but anyone willing to shell out the dough for an unlocked iPhone 5 would be able to access the fastest HSPA network in the country. LTE support on T-Mobile, however, won’t be available until next year when its network overhaul is complete.

As for the rest of the country, Ray said its quickly turning up the new HSPA+ network at PCS in cities nationwide. He wouldn’t reveal any specifics on when the process will be finished, but he has said that a “material” portion of T-Mo’s footprint will be iPhone ready by year-end.

Check out the rest of our Mobilize 2012 coverage here, and the live stream can be found here.

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Legere, 54, will officially change offices on Sept. 22, when interim CEO Jim Alling will return to his old job as T-Mobile’s COO. From his resume, Alling Legere seems like an odd choice. Global Crossing, which was acquired by Level 3 Communications last year, was a submarine cable operator providing the fiber connections that link continents, not a consumer-facing wireless business. Legere had a stint at Dell Computer, but the last time he worked at a retail carrier was in 1998 at AT&T, and even there he wasn’t working in the cellular or consumer side of the house. He managed AT&T’s Asian wireline business operations and headed up corporate strategy.

But then again, someone unaccustomed to how things are usually done in the US mobile industry is exactly what T-Mobile needs right now. If T-Mobile is to succeed it will be through challenging the status quo established by AT&T and Verizon Wireless, which collectively manage two-thirds of all US mobile connections. T-Mobile started down that path after its planned merger with AT&T failed last year. As I wrote when Humm departed in June, T-Mobile’s new CEO shouldn’t change a thing about strategy. It’s not clear whether Legere is going to listen to GigaOM, but hopefully he’ll listen to the T-Mobile’s more-than-capable staff, who started laying the foundation of that challenger strategy long before DT got into bed with Ma Bell.

T-Mobile is questioning the long-accepted accepted pricing models in the US mobile market. It’s moving customers away from device subsidies and in the process eliminating the hidden device “mortgage” payments we make on our monthly bills. It’s offering data plans at a steep discount to AT&T and Verizon, and it recently rejoined Sprint in selling an unlimited smartphone plan.

On the network side, T-Mobile is taking advantage of the limited spectrum resources it has to overhaul its network, shutting down old 2G networks so it can repurpose their airwaves for an LTE network as well as eke out more 3G capacity. In the process, it’s realigning its networks bands with the major North American GSM operators, which will give it access to a greater variety of devices – including the new iPhone. (T-Mobile CTO Neville Ray will detail that transformation at GigaOM’s Mobilize Conference this Friday.)

That network overhaul, however, can’t come soon enough. As the only nationwide US operator sans iPhone, T-Mobile is suffering customer defections it can’t stem no matter how cheap it makes its data plans. T-Mobile is actually 400,000 subscribers smaller today than it was at this time last year.

Legere is going to have to figure out how to staunch that subscriber bleed, but hopefully he won’t do it by reversing T-Mobile’s course and emulating the big operators. Though T-Mobile once had dreams of mega-carrier glory, the failure of AT&T-Mo put an end to those fantasies. Whether it likes it or not, T-Mobile’s new role is that of the market challenger, and it’s not going to succeed by playing the same game as its bigger rivals.

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