Google's Android phone to go on sale in September?

T-Mobile USA could put the new HTC Android phone on sale for select customers as early as the middle of September, according to the blog TmoNews.

The news comes as other rumors circulate that Android phones could be delayed into 2009. But TmoNews says it has a reliable source that says the Android device made by smartphone manufacturer HTC will go on sale through T-Mobile USA on September 17.

The price tag will be US$399 full retail or about US$150 for a subsized phone with a two-year contract. The site also said that only existing T-Mobile customers will be able to buy the phone during the presale timeframe with other customers able to buy the phone a few weeks later in early October.

The new phone, which is being called the HTC Dream in blogs, will support 3G services. A recent video that is posted on YouTube shows that the phone has a touch screen, a slide-out QWERTY keyboard, and a 3-megapixel camera. Google software and services like Gmail will be tightly integrated into the device. And TmoNews reports that a Gmail account will be required to set up service for the new device.

T-Mobile will also likely require a more expensive 3G data plan to be used with the device, the blog reported. But details on the cost of the plan have not been released.

T-Mobile declined to comment on the rumors of the device release, but the carrier has previously said it will offer an Android phone by the end of the year.

Even though the new Android phone is supposed to be 3G capable, subscribers may be disappointed in the 3G experience. T-Mobile is far behind its competitors in rolling out 3G service, with the faster-speed service available only in two markets, New York and Las Vegas. That said, T-Mobile is working to get the service up and running in at least 20 to 25 cities by the end of the year. And it will continue deploying it through 2009. But rolling out a new network is time consuming. So do not expect great coverage anytime soon.

Still, T-Mobile has some other innovative offerings that could appeal to customers. Its HotSpot @Home service allows subscribers to switch between its cell network and a Wi-Fi network for faster speeds and better coverage indoors. It also offers a US$10-a-month voice over IP service for subscribers of this service.

The wireless operator is also supposedly planning to launch an open development platform for all of its phone technologies. This platform will ditch T-Mobile's traditional deck, or menu of services, and replace it with one that is open to any developer. In a way, it is T-Mobile's answer to the Apple App store.

But even with the new Android phone and all these other cool services, T-Mobile has a long way to go in catching up to competitors. The company ended the second quarter of 2008 with 31.5 million customers, putting it in a distant fourth place. Meanwhile, AT&T had 72.9 million subscribers at the end of the second quarter. Verizon Wireless finished the quarter with a total of 68.7 million subscribers. And Sprint Nextel, which lost 901,000 subscribers, still has about 51.9 subscribers.

This article was first published as a blog on CNET News.com.