T-Mobile loses 77K subs amid mixed Q1 results

Wednesday, May 12, 2010

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T-Mobile went back to its losing ways on the subscriber front in the first quarter, posting a 77,000 net loss amid mixed results that also included improving churn and data average revenue per user but falling revenue.

After a fourth quarter that saw subscriber gains thanks to strong holiday sales, T-Mobile returned to a losing trend, shedding 77,000 net customers in the first quarter, a reversal compared to the 371,000 added in the fourth quarter and 415,000 added in the first quarter 2009.

As in the past few quarters, the culprit could be found in the postpaid business, which lost another 118,000 subscribers in the segment, from 117,000 in the fourth quarter and a reversal from the 160,000 subscribers added in prior first quarter. By the end of the quarter, the postpaid base had dropped to 26.6 million.

Prepaid did help offset the postpaid losses, but even that growth was markedly slowed. T-Mobile added 41,000 prepaid customers, well off the 488,000 in the fourth quarter and 255,000 in the first quarter last year. At quarter’s end, T-Mobile’s prepaid subscriber base had grown to just shy of 7.07 million.

In all, T-Mobile’s total wireless subscriber base totaled 33.7 million.

Despite the net customer loss, churn actually improved to 3.1% from 3.3% in the fourth quarter and 3.1% in the first quarter a year ago. Postpaid churn also improved, totaling 2.2% compared to 2.5% in the fourth quarter and 2.3% in the first quarter 2009.

T-Mobile’s data service, however, continued to make steady gains. Wireless data average revenue per user came in at $10.90, up from $10.20 in the fourth quarter and $9.40 in the first quarter a year ago. That boosted total data revenue to $1.1 billion from $1.03 billion in the fourth quarter and $935 million in the first quarter a year ago.

But lagging voice usage once again kept overall wireless ARPU suppressed, totaling $46, the same as in the fourth quarter and down from $48 in the first quarter last year.

The data revenue also couldn’t halt T-Mobile’s declining revenue trend. Total revenue was $5.28 billion, down from $5.41 billion in the fourth quarter and $5.4 billion in the prior first quarter. Net income, however, rose to $362 million from $306 million in the fourth quarter and $322 million in the first quarter a year ago.

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