T-Mobile looking for links to cable services

Bellevue-based T-Mobile USA has decided the best thing to do is to stay the course, bucking a trend by U.S. wireless carriers in the last year to grow through acquisition.

After much speculation, T-Mobile USA's plan for the upcoming year was partly revealed by Kai-Uwe Ricke, the chief executive of T-Mobile USA's German parent company Deutsche Telekom in yesterday's edition of the Financial Times Deutschland.

He said T- Mobile USA will seek partnerships with cable companies to offer mobile services and consider offering a brand for business clients.

"We are in talks with cable companies in the USA to extend our offering to the fixed-line network," Ricke said in a Reuters report. "A new mobile-phone brand for business customers is not ruled out."

He also said the company would "aim for commercial partnerships, not for takeovers or joint ventures," putting an end to rumors that T-Mobile USA might make a bid for a U.S. carrier.

A spokesman with T-Mobile USA declined to comment.

Deutsche Telekom built T-Mobile USA, in part, by purchasing Bellevue-based VoiceStream Wireless for $40 billion in 2001. Since then, it has become the hip wireless provider in the U.S., growing larger than its T-Mobile counterpart in Germany.

But it trails far behind the top three U.S. carriers, which dominate 75 percent of the market.

Cingular Wireless, which acquired AT&T Wireless late this year, is in first place with 47 million subscribers; Verizon Wireless is in second with 42 million, and Sprint and Nextel will become the third-largest carrier with almost 39 million after their merger becomes complete. T-Mobile has about 17 million subscribers.

"Next year it will be about 20 million users and, by 2010, we are aiming for 30 [million] to 35 million," Ricke said.

To add more customers, it will also have to add capacity on its wireless network to ensure good coverage. It will do that by purchasing more spectrum, or airwaves. Deutsche Telekom has earmarked 2 billion euros (about $2.7 billion) for buying wireless spectrum.

If T-Mobile USA does join with cable companies to provide wireless services, it will be mimicking a move by Sprint, which aggressively resells wireless services through companies such as Virgin Mobile and Qwest.

Jeff Kagan, an independent telecom analyst in Marietta, Ga., said partnerships with cable or phone companies will be the next big opportunity for growth in the wireless industry.

He said cable companies will have to offer wireless services as the two industries fight to be the one that provides consumers everything from local, long distance, cable, Internet and eventually wireless service.

"Cable companies are just starting to explore wireless in order to compete with the Bell [phone companies]. They have to; they are all offering everything. They are going to have to provide wireless. The only question is when they will make an announcement."

Analyst Derek Kerton of Kerton Group in San Jose, Calif., said it makes sense that T-Mobile would join with cable companies because it is now the only major wireless carrier that does not have a corporate relationship with a phone company — a position it has gained only in the last year with the sale of independently operated AT&T Wireless to Cingular, owned by SBC Communications and BellSouth, and Nextel to Sprint.

"T-Mobile is the only one unencumbered by a landline business. They are a natural to partner with cable," he said. "Obviously, the message was received loud and clear in Germany."

Tricia Duryee: 206-464-3283 or tduryee@seattletimes.com. Reuters contributed to this report.