T-Mobile and the iPhone: 7% of the way to becoming friends

T-Mobile USA iPhone(s aapl) users can start rejoicing this summer – at least a few of them can. T-Mobile will complete its planned conversion from GSM to HSPA+ on 2,500 of its cell sites this July, T-Mo CTO Neville Ray revealed at the NGNM conference on Thursday. The upgrade will put its mobile broadband network firmly in the PCS band in 7 percent of its network, which makes it compatible with all current versions of the iPhone.

That doesn’t mean T-Mobile will start selling the iPhone directly, but some of the million-plus current unlocked or hacked iPhones on T-Mo’s network may soon start seeing a “4G” icon popping up on their notification bars, as well as find their current slow-poke Edge speeds jump up to multiple megabits per second. Any customer coming off an AT&T(s T) contract with an unlocked iPhone 3GS, 4 or 4S will be able to buy a SIM card and hook into the HSPA+ network where the upgrade is complete.

In a blog post, T-Mobile revealed more details about its ambitious spectrum refarming plans, which requires sunsetting a large portion of its 2G capacity. It is changing out gear in 400 of its cell sites this month as an initial test before its engages in a large-scale conversion next month.

Those 2,500 cell sites are only a fraction of T-Mobile’s 37,000-site network, so most of the country will have to wait before they can get mobile broadband at the PCS band. But T-Mobile will most likely target whole cities for the refarming, rather than upgrade a handful of sites in each market. So if you happen to leave in one of those select markets you may get close to uniform HSPA+ coverage. The first city on the list is most likely San Francisco, where T-Mobile has already tested the new network – not coincidentally during Apple’s World Wide Developer conference.

Apple won’t actually tap T-Mobile to be an iPhone retailer until all or most of its HSPA+ network is converted to PCS. That day could come as soon as this year or it may not come until well into 2013 right up to the point it launches its LTE network. My bet, though, is we’ll see a fully functioning and nationwide HSPA+ network on PCS long before we see LTE. T-Mobile needs to activate HSPA+ at PCS before it can start shutting down its current mobile broadband networks in the Advanced Wireless Services band, which is the spectrum that will host its LTE service.

The iPhone 4S can’t match T-Mobile’s theoretical 21 Mbps and 42 Mbps of T-Mobiles HSPA+ and dual-carrier networks, but it still has a substantial ceiling of 14.4 Mbps, providing an experience comparable to AT&T’s network and much faster than what Sprint(s s) and Verizon Wireless(s vz)(s vod) can currently offer on their CDMA networks.