Deutsche Telekom’s T-Mobile USA unit is set to invest €7 billion in its 2G and 3G networks through to 2009, a move that it expects will hurt profitability growth at the division in the next two years. Spending on networks and the launch of faster services based on HSPA technology will prevent the profit margin from reaching a “mid-30s” percent target, T-Mobile USA CEO Robert Dotson told a conference in Phoenix. He was positive about reaching that range long-term, but did not specify a timeframe. “If you look at where our margins are today – low 30, 31, where we’ve been over the last 12 months – clearly there’s a path for us that we feel good about getting to that mid-30s area.”

T-Mobile USA added 857,000 subscribers in the third quarter for a total of 27.7 million at the end of September. The company is the fourth largest U.S. mobile operator by customers, behind AT&T, Verizon Wireless and Sprint Nextel. Deutsche Telekom bought VoiceStream Wireless, now T-Mobile USA, for US$35 billion in 2001.