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Data Usage Be Damned, T-Mobile Losing Its Grip on Customers

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T-MoT-Mobile USA lost 77,000 customers and saw revenue continue to slide in the third quarter even as its operating profit margin increased two percentage points. But the nation’s fourth-largest carrier continued to enjoy a surge in mobile data uptake and said it will continue to aggressively — if belatedly — roll out its 3G network next year.

T-Mobile USA is fighting heated battles on both ends of the mobile spectrum: It has introduced competitive prepaid plans in an effort to compete with cut-rate service providers such as Leap Wireless (s leap) and MetroPCS (s pcs), and it is vying for revenue-boosting, smartphone-using consumers with devices such as the Android-based Motorola (s mot) Cliq and myTouch 3G. But while the carrier’s strategy may be paying dividends for shareholders of parent company Deutsche Telekom (s dt), it will have to address the serious network hiccups that have infuriated customers in recent weeks.
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DT blamed increasing competition and competitors’ “handset innovation” for its 2.4 percent churn rate, which was unchanged from the previous quarter. T-Mobile USA’s $5.57 billion in revenue was up 2.8 percent from the year-ago period, and its all-important data traffic grew by 45 percent quarter over quarter.

The carrier spent $800 million to build out its 3G network in the U.S. during the quarter, though, and said the network will cover 200 million Americans by the end of the year. T-Mobile brought 5,200 cell sites online during the period and said it plans to add nearly 4,000 more sites by the end of the year, reaching 25,000 total sites. That build-out will be necessary to meet the demands of T-Mo’s rapidly expanding base of data-hungry customers.

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