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Tuesday, November 20, 2012, 09:25 pm PT (12:25 am ET)

T-Mobile deems Apple partnership too costly despite 1.5M unlocked iPhones on network

A T-Mobile executive said on Tuesday that becoming an Apple partner carrier would be too costly, but admitted not having the iPhone available for sale has driven away potential customers and some of the 1.5 million existing subscribers using unlocked version of the handset on the telecom's network.

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Speaking during the Morgan Stanley Annual Technology, Media & Telecoms Conference in Spain, T-Mobile USA Chief Operating Officer Jim Ailing said that his company is not willing to make the major investment of becoming an official Apple partner carrier despite losing customers to iPhone-carrying rivals, reports Fierce Broadband Wireless.

"Make no mistake about it: We would love to carry the iPhone," Ailing said at a discussion featuring executives from T-Mobile and MetroPCS. "However, we want the economies to be right for us." The Deutsche Telekom-owned T-Mobile will merge with MetroPCS in a deal expected to be completed by early 2013.

Ailing alluded to the recent deal Sprint made with Apple in October 2011, saying he would not want to sign on to such an agreement. Sprint became an Apple partner after signing onto a four-year contract that was later revealed to be worth $15.5 billion. Since the agreement, the third-largest U.S. telecom saw three straight quarters of growth, most recently activating 1.5 million iPhones in the three month period ending in October.

T-Mobile has previously attested to the iPhone's drawing power and said in February that it lost some 700,000 subscribers primarily due to the launch of the iPhone 4S.

"We recognize that it has been a point of churn for us," Ailing said, adding that the iPhone 5 release negatively impacted T-mobile and will likely continue to affect the nation's fifth-largest carrier going into the fourth quarter.

In an attempt to offset some of the burden associated with not having rights to sell the iPhone on its network, T-Mobile offers "Value Plans" that include an iPhone-ready SIM card, which has attracted some 1.5 million unlocked iPhone users. Legacy iPhones are limited to the operator's 1900MHz GSM service, however, and the new iPhone 5 isn't able to reach its LTE capabilities until T-Mobile upgrades its network. The carrier is currently building out 4G HSPA+ and LTE assets, which will cover bandwidths supported by Apple's newest handset.