iPhone 5 Causing T-Mobile (TMUS) Pain in the Wallet

T-Mobile (NYSE: TMUS) recently raised the upfront cost on Apple's (Nasdaq: AAPL) iPhone 5 by $50, taking it to $150. In the view of Nomura analyst Mike McCormack, the price increase indicates pain created by the high upfront cash cost, as T-Mobile carries the highest iPhone 5 subsidy among major carriers.

"T-Mobile USA announced that it had sold 500k iPhone 5s to new and existing customers by May 8th, but the iPain may have become too much," said McCormack.

"This reinforces our view that TMobile's Simple Choice plans are very similar to a traditional post-paid plan, with a subsidy and contract implied by the monthly equipment instalments. While EBITDA will be inflated due to accounting, Simple Choice plans will be a drag to T-Mobile US' cash balance," he added.

Nomura Securities has a Neutral rating on T-Mobile US with a price target of $15.00

For an analyst ratings summary and ratings history on T-Mobile US, (NYSE: TMUS) click here. For more ratings news on T-Mobile US, click here.

Shares of T-Mobile US, closed at $18.92 yesterday.

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