T-Mobile reports lower net income for fourth quarter

T-Mobile reports lower net income for fourth quarter
T-Mobile, the nation's fourth largest cellular carrier, added 317,000 new customers on a net basis in the fourth quarter of 2009. That was a sharp increase from the net loss of 77,000 customers that was reported for the prior three months. However, most of those new accounts were not opened by those signing contracts. On a net basis, contract customers dropped by 117,000 in the fourth quarter. That is an improvement of the 140,000 contract customers that T-Mobile lost in the third quarter. In the fourth quarter of 2008, the carrier added a net total of 267,000. At the end of the year, T-Mobile had 33.8 million customers, up from 32.8 million at the end of 2008. Despite adding customers, the cost of acquiring those customers and for advertising led the company to report a lower net income of $306 million for the last 3 months of the year. That compares to third quarter earnings of $417 million and year ago profits of $483 million. Revenue was $5.41 billion in the last 3 months of last year, up from the $5.38 billion that came in during the third quarter and down from the year earlier figure of $5.72 billion.

Part of the reason for the drop in earnings despite customer additions was the drop in contract Average Revenue Per User (ARPU) to $51 per month. That compares with the $52 monthly average for the third quarter and the $54 average for the 2008 period. Another reason for the earnings decline was the increase in the cost of acquiring a customer to $300 from $290 in the previous three month period and $270 a year ago. René Obermann, CEO of T-Mobile USA's parent company, Deutsche Telekom, said, "T-Mobile USA made significant progress in 2009 in expanding its 3Gnetwork, improving its 3G-capable device lineup, enhancing itsdistribution, and underscoring its value proposition. This creates asolid foundation to benefit from the robust mobile Internet market." The next earnings report will be the first to include any impact from the Nexus One. While Google is selling the handset on its web site, right now service is provided by only T-Mobile. On March 24th, the carrier is expected to launch the sizzling hot HTC HD2 which won't have any major impact until the company's second quarter report.

HTC Nexus One Specifications | Review
HTC HD2 US Specifications | Review (European)

source: Yahoo



1. Homotechual

Posts: 65; Member since: Oct 27, 2009

Good for T-Mobile, Now watch that number double every year with the improvments T-Mobile is making with their handsets, and coverage. What the article FAILS to notice is OBVIOUSLY T-Mobile is going to lose contract customers, not because their lower income customers, because they have NO CONTRACT plans now. Most the customers switching from AT&T and Verizon I switch at T-Mobile are going on the Even More PLUS plans. Meaning NO CONTRACT*

2. herbiederb

Posts: 275; Member since: Jan 28, 2010

Agreed. +1 I will be a new T-Mo customer on March 24th... SOLD!

3. remixfa

Posts: 14605; Member since: Dec 19, 2008

id say 95% of new customers are no contract. That doesnt mean they are bad credit prepays (of course, we still have those too), but the cost benifit of going no contract far outweighs getting a contract plan, even with the full price phones included. I only ever pull out the contract plan card just to show how much they really save by going even more plus (no contract). whoever wrote this article needs to keep up with the times. Yea the ARPU went down a bit because the new plans are uber cheap. And in a time of 10%+ unemployment and job uncertanty, those super cheap no contract plans are starting to appeal to a huge audience... and not just to the metro users. I dunno about you but weve been like 150% to quota every month since EMP came out. the true "fastest 3g network", nationwide coverage on par(or better than) ATT, no contracts, kickass phones, and cheap as hell plans... how can u go wrong? LOL.

6. theman10

Posts: 93; Member since: May 16, 2009

That was such a dumb comment, full of inaccuracies and lies

4. rwolf1984

Posts: 536; Member since: Jun 06, 2009

T-Mo and Sprint need to be careful with their no contract option. Falling profit and income isnt good...I am not worried so much about T-Mo cuz if T-Mo in Europe wanted to make the investment in T-Mo USA they could be the #1 carrier. @ Remixfa T-Mo is not the fastest. AT&T and Sprint are according to PC World survey...

8. remixfa

Posts: 14605; Member since: Dec 19, 2008

yea, and according to that, they didnt test in Philladelphia where tmobile is running its new HSPA+ network at 21mbps. Which is also where they reviewed the new Web connect Rocket Internet card and said its faster than sprints WiMax in real world usage. ATT's max is 7.2mb/s, Sprint and Verizon's max is about 3mb/s, Tmobiles Max is 21mb/s. (ATT's max and Tmobiles Max are not nationwide) Easy math. And.. theman.. can you point out all the "lies and inaccuracies" with some factual evidence? :)

5. Homotechual

Posts: 65; Member since: Oct 27, 2009

I don't look at PC WORLD, I look at Consumer Reports and T-Mobile was ranked #2 based off of an overall score beatng AT&T and Sprint.

7. arleslie

Posts: 2; Member since: Feb 14, 2010

Tmobile's no contact plans appeals to the general consumers, they still have the best phones,plans, and the best representatives. Based on my experience, they cater to everybody's needs whether its pre, flexpay and post pay. Coverage has been an issue sometimes, but would not trade carriers even for an iphone.

9. mattkl

Posts: 255; Member since: Feb 01, 2010

Well the fact that T-Mobile tends to be getting the more appealing phones leads me to believe the phone manufactures know something we don't. Never forget that businesses are out to make money and if they see something good or know of a way to make money they will. I am curious to see HSPA come out nation wide from T-Mobile and test it out. They were so behind with 3G I bet they won't make that mistake again with their HSPA.

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