T-Mobile Adds New Customers in Q3 on Prepaid Growth
After three quarters of subscriber losses, T-Mobile USA gained 126,000 net new subscribers in Q3, helped by growth in prepaid. Net income was $332 million, up 4 percent year-over-year. Parent company Deutsche Telekom still expects to complete the T-Mobile transaction on time, CEO René Obermann said during a conference call Thursday.
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T-Mobile grew its number of prepaid customers by 312,000 though its postpaid customer count was down by 186,000. Some 40 percent of the customers (10.1 million users) are now on smartphones, T-Mobile said. The company had 33.7 million total customers at the end of the quarter. T-Mobile CEO Philipp Humm said the launch of Apple’s iPhone 4S by the three other national carriers could contribute to future postpaid churn, which will “continue to be an area of concern.” Blended churn was up slightly to 3.5 percent from last year, helped by higher churn from mobile virtual network operator customers. T-Mobile’s capital expenditures rose 15 percent year-over-year to $741 million in the period as the operator expanded its HSPA+ networks. The carrier has gotten better at winning new customers, but the churn still isn’t satisfactory, Obermann said. “It looks as if that’s still going to be the case in the fourth quarter.”
"We remain convinced that we will be able to keep to our timetable for the transaction” and the company, with AT&T, will ultimately receive approval for the transaction, Obermann said. The sale is positive for the U.S. wireless market and consumers, he said. The deal remains a top priority for the company, he said. Despite a weak European market, the parent company raised its profit by 14 percent to $1.45 billion. Due to continued pressure from a tough economy and competition, operating profit from the European unit declined 5.3 percent year-over-year. The business environment is unlikely to get better soon, Obermann said. “We have to assume that economic development is unlikely to boost our business.” The economic situation is expected to remain critical in Greece and Romania this year, executives said. Still, Deutsche Telekom expects earnings from continuing operations of around $20.2 billion. For its U.S. business, the company expects earnings of around $5.5 billion.
AT&T, Verizon Wireless, Sprint Nextel and T-Mobile had a total of 295.1 million subscribers at the end of Q3, up from 268.6 million from a year ago. They added a total of 5.01 million net new customers in the quarter, up from 4.4 million in Q3 last year. While Verizon still has the most subscribers (107.7 million), AT&T added the most number of net new customers in Q3 (2.1 million).