T-Mobile: 1 million Android phones sold

Deutsche Telekomrevealed one particularly interesting tidbit when it released T-Mobile’s Q1 subscriber numbers Monday: T-Mobile USA has sold 1 million G1 Android phones since the Google-powered deviceemerged in October. While1 millionis still small compared to AT&T’s salesof the Apple iPhone (AT&Tjust reportedactivating1.6 million iPhones in the first quarter alone), for tiny T-Mobile, its still quite a feat, especially considering its 3G networks are stillgoing throughpuberty.

When T-Mobile first released the G1, it had just rolled outhigh-speedpacket access(HSPA) service that summer and had only 21 major markets to sell the Android device in. Since then T-Mobile has expanded its 3G footprint to cover 107 million people and even started selling the G1 in its GPRS/EDGE-only markets.But those effortspale in comparison tothe mightApple/AT&Tjuggernaut: a big network and sales operation backed by an even bigger marketing and sales push. By the end of this year, T-Mobileplans to havea little more than 200 million people covered with HSPA, which would still put it far behind the big 3 operators.

T-Mobile’s 3G efforts alsoappear to be driven by a single device. DT revealed that T-Mobile now has roughly 1.5 million 3G devices on its network, meaning the G1 accounts for about two-thirds of all 3G devices sold. AT&T, too, is heavily dependent on the iPhone to drive its data growth, but its 3G base is more diversified: 3G iPhones account for 6 million of the 19.3 million 3G integrated devices operating on its network. AT&T, of course, had a large stable of 3G devices and services before the iPhone launched. Meanwhile, T-Mobile essentially launched its HSPA network with the G1 and only has a few other devices that support 3G at its Advanced Wireless Service (AWS) band. Thathelps explain the disparity. But the dominance of the G1 on T-Mobile’s network could make it vulnerable. If the G1 loses its momentum, T-Mobile doesn’t have much to fall back on.

While T-Mobile may be attracting a lot of G1 users, it hasn’tgained enough to offset T-Mobile’s shift toward the low-end of mobile service specturm. In the first quarter, T-Mobile’s saw it net customer additions fall by 50%, and the majority of those new adds were prepaid customers. In addition, its average revenue per subscriber(ARPU) dropped by $3 a month, compared to last year. The G1 was supposed to boost APRU by bringing in high-value data users to the network, butthe recession is causingthe opposite is happening. The G1 and other 3G devices are certainly preventing an even bigger ARPU decline, but it seems that for every G1 subscriber T-Mobile signs up or upgrades, several others are dropping down to prepaid plans.

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