It’s really hard to be a wireless carrier right now unless you’re AT&T (NYSE: T) or Verizon. T-Mobile became the fifth smaller carrier to post disappointing results in the last two weeks, with subscriber losses and revenue shortfalls continuing to prove that life’s better on top.
T-Mobile’s results weren’t quite as bad as those of Sprint (NYSE: S), MetroPCS, Leap Wireless, or Clearwire (NSDQ: CLWR), all of which are losing money. T-Mobile is still contributing a profit to Deutsche Telekom (NYSE: DT), its parent company, but revenue slid 5 percent as 281,000 contract customers said good-bye to T-Mobile during the quarter. Overall T-Mobile only lost 50,000 customers, which is a better performance than in recent quarters, but the contract customers are far more valuable than prepaid customers.
The company blamed “intense competitive pressures in the US wireless marketplace” for its performance, no doubt with one eye on the talking points attached to the proposed AT&T/T-Mobile merger. However, those competitive pressures are only benefiting two companies–AT&T and Verizon–as the smaller players in wireless suffer amid continued weakness in the economy and the exclusive smartphone deals that the larger carriers can lock up as demand shifts away from boring feature phones.
T-Mobile is in a much better position than smaller carriers like MetroPCS and Leap, having been a close partner with Google (NSDQ: GOOG) on the launch of many Android devices. But it has the same problems trying to build out an advanced wireless network, an extremely expensive undertaking that isn’t any easier when you’ve built a reputation as the low-cost carrier.