Economy, iPhone drag at T-Mobile USA’s Q3
Analyst: No. 4 carrier lost customers to AT&T Mobility
November 6 2008 - 12:57 pm ET | Allie Winter | RCR Wireless News
One of a number of new gadgets set for release at T-Mobile USA, the touchscreen Samsung Behold will go for $150 with a two-year contract.
The third quarter was a rough one for T-Mobile USA Inc. The carrier posted the lowest number postpaid net additions — 293,000 — since its inception in 2001, according to Kate Price of Technology Business Research Inc.
“Some high-value, postpaid subscribers were likely drawn to AT&T by the iPhone, while the downturn in the economy may have prompted more subscribers than usual to sign up for prepaid plans to save money,” Price said.
This assessment seems to be borne out by T-Mobile USA’s 377,000 prepaid net additions for the third quarter, a significant increase from the 143,000 prepaid customers it added during the second quarter of this year. T-Mobile ended the quarter with 32.1 million total customers
“AT&T indicated it saw 1 million customers switch to AT&T due to the iPhone and it appears many of those customers may have come from T-Mobile,” Price said.
Indeed, AT&T Mobility added more net customers in one quarter than it has ever before, while Verizon Wireless reported nearly equal customer additions. Sprint Nextel Corp. is set to report earnings tomorrow.
As for T-Mobile USA’s finances, the carrier posted $452 million in net income during the second quarter, down from the $526 million it scored in last year’s third quarter.
And as for T-Mobile USA’s customer metrics:
--The carrier’s average revenue per user, or ARPU, remained the same as compared with the second quarter, at $52. Last year the carrier saw ARPU range from $55 to $57.
--The carrier credited its low postpaid adds to higher churn, which reached 2.4% this quarter, up from the reported 1.9% churn in the second quarter. T-Mobile USA blamed the higher churn on the large number of expiring two-year contracts and the ever-present competitive pressure.
Interestingly, T-Mobile USA last month began selling the G1 by Google Inc. and HTC Corp. in an apparent attempt to staunch loses to AT&T Mobility and the iPhone. However, the device didn’t quite make it to store shelves in time to affect third-quarter numbers.
Devices in time for holidays
In other T-Mobile USA news, the carrier announced three new gadgets:
--Samsung Electronics Co. Ltd. Behold, a “3G-enabled touchscreen with full Web browsing,” according to the carrier. The device will go for $150 with a two-year contract starting Nov. 10
--T-Mobile cameo, which according to the carrier is a “digital picture frame that displays pictures sent to it via MMS and e-mail.” The device will be available “in the coming weeks” for $100 with a $10-per-month reoccurring charge.
--Samsung Gravity, which T-Mobile said will feature a slide-out QWERTY keyboard. The device will go on sale Nov. 17 for $50 with a two-year contract.
January 5, 2009 05:51 pm
We agree. T-Mobile has coasted on reasonable calling plans, but has failed to provide serious smartphone options for power postpaid users. Instead, they have pushed sales to the young adult/sidekick crowd; who are the same customers who dropped helio and other prepaid/ hybrid models like a rock. It's a shame. They simply ignored their North American handset market... and are beginning to pay the price.
November 12, 2008 05:17 pm
robert b is exactly correct..my 2 stores had there t-mobile dealerships revoked and its happening everywhere here in town.
November 7, 2008 04:04 pm
no matter the stress, they still can stand on the place in Q3the scene should look better in the Q4 though
November 6, 2008 03:21 pm
The above post is absolutely correct. But there is another reason too which I think caused a big drop in activations for T-Mobile. Ever since 2001, T-mobiles main activations were comming from Indirect dealers. However since the begining of 2008 it seems that they adopted a new strategy. All of their conditions are more and more less favorable towards indirect dealers. Many lost their dealership license and many closed shop. This caused a lot of us remaining to be less loyal to t-mobile. Ever since June of this year the decision was made for my store to push Verizon, Metro, Boost and other carriers instead. I know the same is true for at least 11-12 of other dealers that i know in my immediate area. Thats why thier T-mobile@home is a failure and thats why it seems that the G1 will be too. Now they are hoping that Wal-mart will be able to replace us!!!! Go figure...
November 6, 2008 03:21 pm
The main reason T-MobileUSA is bleeding is because the smart devices users want this holiday season aren't available for their subscribers. With contracts up, 3G is a new priority, and it won't suffice being connected to a featurephone. Despite their reputation, T-MobileUSA has a large unlocked smartphone subscriber base. Patience has worn thin waiting for 3G devices for their long awaited network. With contracts up, the economy down, and little money to afford an unlocked device today, subsidized models are more attractive. T-MobileUSA missed the opportunity to get agreements to have Nokia's Nseries and Eseries models ready for its loyal users there. Besides the G1, what else is there? So users regrettably defect to at&t.
November 6, 2008 03:21 pm
The main reason T-MobileUSA is bleeding is because the smart devices users want this holiday season aren't available for their subscribers. With contracts up, 3G is a new priority, and it won't suffice being connected to a featurephone. Despite their reputation, T-MobileUSA has a large unlocked smartphone subscriber base. Patience has worn thin waiting for 3G devices for their long awaited network. With contracts up, the economy down, and little money to afford an unlocked device today, subsidized models are more attractive. T-MobileUSA missed the opportunity to get agreements to have Nokia's Nseries and Eseries models ready for its loyal users there. Besides the G1, what else is there? So users regrettably defect to at&t.