T-Mobile Loses Customers, Hopes Its 3.5G Bet Pays Off

T-Mobile today released first-quarter financial results that show a loss of both prepaid and post-paid customers, but also made clear that those who did remain with the network are increasingly using high-speed mobile broadband handsets — a key use case that T-Mobile hopes will pay off down the line.

The carrier reports 33.7 million current customers, down slightly from 33.8 million in the the last quarter of 2009. But subscriber count isn’t the game T-Mobile is playing right now. Instead, the high-stakes poker match is one of network expansion and T-Mobile is going all-in with a faster data network.

While other U.S. carriers are looking to 4G networks like LTE and WiMAX, T-Mobile’s relatively limited spectrum has the company maturing its current 3G HSPA network to one of 3.5G HSPA+. The faster data network is already available in New York City, New Jersey, Long Island, suburban Washington, D.C. and Philadelphia — see my hands-on with the 3.5G in Philadelphia — and T-Mobile plans to expand the speedier coverage to 100 metropolitan areas and 185 million people by the end of 2010. While more spectrum would allow for options beyond 3.5G, Cole Brodman, T-Mobile’s CTO, recently told us in a GigaOM interview that he believes the wireless portfolio will keep the company “competitive in the near and medium term — for the next couple of years.” Indeed, the theoretical speeds of HSPA+ are greater than 80 Mbps — T-Mobile’s current rollout supports 21 Mbps and I’ve witnessed real-world speeds approaching 10 Mbps.

With the expansion of its faster data network, T-Mobile is walking a fine line in 2010. Having launched a 3G network in September 2008, the company needs to quickly execute the 3.5G rollout so as not to lose additional customers. If T-Mobile can add existing or new ones to its faster wireless broadband platform, it can raise blended ARPU — which was down to $46 from $48 in the prior year.

Related content from GigaOM Pro (sub req’d):

Metered Mobile Data is Coming and Here’s How

Everybody Hertz: The Looming Spectrum Crisis

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