T-Mobile USA unveils 3G plan

Deutsche Telekom’s US mobile unit, T-Mobile USA, said Friday it is budgeting around Eur2.1bn (£1.4bn) for the deployment of a 3G network between 2006 and 2009.

T-Mobile USA has already splashed out over $4bn at the recent Advanced Wireless Services (AWS) spectrum auction held in the US, in order to get the frequencies needed to rollout 3G infrastructure. Work on the new network is scheduled to begin immediately, with a majority to be completed before 2008.

During a conference call for press and analysts on Friday, DT chief executive Kai-Uwe Ricke said that the increase in investment by T-Mobile USA in its network infrastructure will be lower, however, because some investments in the existing network can be reduced as the rollout of the 3G network progresses.

The total costs of the acquisition of frequency and the construction of the new network do not lead to any change to Deutsche Telekom’s revenue and profit guidance for 2006 and 2007, Ricke said.

Under DT’s “Telekom 2010” strategy, the German carrier is aiming to make T-Mobile USA the largest single company within the group. The US unit has been delivering the lion’s share of revenues for some time already, but DT anticipates strong growth in the market where the current penetration rate of around 73 per cent is considerably lower than in Western European markets.

Voice traffic in the US market is expected to grow two or three fold in the coming years until 2015, driven in part by continued fixed-mobile substitution, Ricke said, while the carrier also expects strong growth in data services. Data already accounted for around 11 per cent of T-Mobile’s average revenue per user in the second quarter of 2006.