Capitalizing on a recent blog post, T-Mobile USA rode robust prepaid growth to post positive net customer addition growth for the first quarter. That growth however, was not shared on the carrier’s more lucrative direct postpaid operations that continued to bleed customers.
During the first three months of this year T-Mobile USA said it added 249,000 direct prepaid subscribers that was offset by the loss of 510,000 postpaid subscribers that resulted in the loss of 262,000 total direct customers during the quarter. It should be noted that those results were significant better year-over-year when the carrier lost 574,000 postpaid subscribers and lost 82,000 prepaid customers resulting in the loss of 656,000 customers.
T-Mobile USA CEO Philipp Humm explained that the continued loss of contract customers was a trend that needed to be addressed. For its prepaid operations, the carrier touted increased positive trends in the port-in ratio of subscribers from regional rivals MetroPCS and Leap Wireless.
T-Mobile USA’s management noted that the turnaround was bolstered by improved gross customer additions for its prepaid offering as well as slight improvements in customer churn. The carrier’s postpaid churn improved from 2.6% last year to 2.5% this year, while prepaid churn dropped from 7% in 2011 to 6.4% this year. Blended churn was down from 3.3% to 3.2%
Outside of its direct channels, T-Mobile USA posted year-over-year gains in machine-to-machine connections, increasing from 192,000 net additions in 2011 to 262,000 net additions this year. Net additions through its mobile virtual network operator channels dipped from 365,000 net additions last year to 187,000 net additions this year, with the carriers total customer base turning around a loss of 99,000 customers during the first quarter of 2011 to a gain of 187,000 customers this year.
While T-Mobile USA’s customers across its postpaid and prepaid base continue to spend more each month, the change in that mix towards prepaid dropped blended average revenue per user from $46 during the first quarter of 2011 to $45 this year. Data ARPU increased $2.30 year-over-year to $16.90.
T-Mobile USA noted that smartphone sales increased from 2 million units during the first quarter of 2011 to 2.5 million units this year, and accounted for 80% of all device sales and 94% of handset sale revenues during the most recent quarter.
T-Mobile USA also highlighted that recently announced network plans would align its current HSPA+ network with technology supported in Apple’s iPhone 4S, paving the way for AT&T Mobility customers to bring their device to T-Mobile USA, which does not officially offer the iconic device for sale. Humm did not offer any insight into what the carrier might do to try to lure consumers, though some the carrier’s latest advertising does mention the slow speeds AT&T Mobility’s iPhone generates compared to higher-speed HSPA+ devices running across T-Mobile USA’s network.
That slight dip in ARPU offset the improved customer growth to drop T-Mobile USA’s total revenues 2.5% year-over-year to $5.034 billion for the first quarter. Operating expenses took a slightly bigger dip, falling from $4.7 billion in 2011 to $4.5 billion this year, resulting in a slight uptick in net income.
Capital expenditures for the quarter increased slightly to $747 billion, which T-Mobile USA attributed to increased work surrounding its recently announced LTE roll out plans. The carrier announced this week that it had signed $4 billion worth of contracts with Ericsson and Nokia Siemens Networks for that work.
Humm also refused to comment on recent rumors about a possible link up between T-Mobile USA and MetroPCS.
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