T-Mobile USA continues as DT catalyst

T-Mobile USA Inc. again proved to be the biggest wireless growth engine for its parent company, Deutsche Telekom AG, despite a significant year-over-year drop in its net number of new customers.
T-Mobile USA reported 901,000 net subscriber additions during the fourth quarter, down from the 1.39 million customers that it added during the fourth quarter of 2005. However, the mix of customers improved, with 87 percent of the customers coming from postpaid, an increase from the 66 percent in 2005
T-Mobile USA’s total churn was flat year-over-year, and postpaid churn declined from 2.3 percent in the fourth quarter of 2005 to 2.1 percent during the same period of 2006. T-Mobile USA ended the year with more than 25 million customers.
The carrier’s net income was down as well, primarily due to income tax benefits received in prior quarters, the company said. Profits for the quarter were $179 million, down sequentially from $1.79 billion and from $2.99 billion in the fourth quarter of 2005. Service revenues, however, were up from $3.26 billion in 2005’s fourth quarter to $3.81 billion for 2006’s fourth quarter. Blended average revenue per user was unchanged year-over-year at $52, but postpaid ARPU increased from $54 to $56. Data ARPU grew from $4.80 in the fourth quarter of 2005 to $6.50 during the same period of 2006.
Rene Obermann, chairman of DT, said in a company statement that T-Mobile USA “is playing an increasingly vital role in bringing a service leadership culture to all of DT” and it continued “to assert its position as the leading growth driver for Deutsche Telekom.”
The parent company didn’t have an easy year of it. In the company’s annual report, Obermann said that 2006 was a “difficult, indeed a tough financial year” for the company, “and 2007 will certainly not be easier.” The company, which in January revised downward some of its guidance for this year, outlined a strategy to improve its fortunes which included improving its competitiveness in its home market of Germany, mobilizing the Internet and growing its international wireless business.