T-Mobile grows but its lack of iPhone is still a problem


Cole Brodman - CMO and EVP, T-Mobile USA at Mobilize 2011T-Mobile is still struggling to find its footing as the smallest major U.S. carrier after its planned acquisition by AT&T (s t) fell through. In the first full quarter after the proposed merger was scuttled the nation’s fourth largest carrier managed to gain only 187,000 customers and reported $5 billion in revenue — a 2.5 percent drop from the same period last year.

However, a closer look at the make up of the first quarter of 2012 subscriber numbers shows T-Mo has a mixed mag: the post-paid contract customers that generate the highest and most predictable revenue declined by 510,000, while the average revenue per postpaid user was up by $2 to $58. So T-Mobile has fewer customers but it’s making more money on those it has. What’s really hurting T-Mobile, though, is the lack of an iPhone (s aapl), which CEO Phillip Hume admitted in the results call.

Unfortunately he declined to speculate on the timing of an iPhone for T-Mobile, and when questioned about not having the device for sale explained that people were activating phones that could work in T-Mobile’s spectrum bands.

On the prepaid side T-Mobile gained 249,000 customers. Hume attributed the growth in that area to the 4G modem products using T-Mobile’s HSPA+ network, which also saw average revenue per user rise by $1 year-on-year to $25 per subscriber.

The company also saw net adds of 262,000 for the quarter from its machine to machine business — a growth area for most carriers, especially in the saturated U.S. market. M2M is a bit more of a precarious business, as one big customer loss can have a huge effect on the subscriptions and revenue per user is lower than traditional subscribers. Profits can be high on a per megabyte basis though compared to the data used, which is why AT&T, Verizon(s vz)(s vod) and Sprint(s s) are pursuing it so aggressively.

When asked, Hume downplayed the effect of M2M on T-Mobile’s business, as compared with contract customer growth, pointing out the difference in APRU of $58 for a contract customer versus $2 for an M2M customer. The question though is how much money can T-Mobile make per bit delivered to an M2M customers versus a contract customer.

On the financial side, T-Mobile is trying to discontinue cheaper plans and focus on increasing revenue from customers, while also maintaining its credibility as a value player. It is seeing some success in this area, mostly because it is offering a better service than its competitors on the pre-paid side. On the technical side, T-Mobile is continuing with its network modernization plan that will see it deploy LTE by next year. Hume was asked about T-Mobile’s interest in the Verizon spectrum, which he said wouldn’t work for T-Mobile. He was also asked about yesterday’s story on a deal with MetroPCS (s pcs) which he declined to comment on.


Art Brodsky

We wouldn’t want T-Mo to go into severe financial trauma to meet the Apple’s terms for the phone, would we?


Amen! Until providers build out serious infrastructure that supports data throughput for the hardware already on the market, then I am not interested in sharing.


Many of the listed conditions above are directly related to why I am a T-mobile customer. Apple can shove its phone up its ass. I would rather not have to battle with iPhone obsessed for a degradation in in mobile signal quality.

Comments are closed.