Tough Q2 for T-Mo, MetroPCS

T-Mobile USA posted a disappointing 325,000 net customer additions for the second quarter, which was half the 668,000 customers it added during the second quarter of 2008. The 2009 growth was also predominately prepaid, which accounted for 80% of new customer additions compared with the opposite ratio in the second quarter of 2008. The downside of more prepaid customers is that prepaid ARPU is less than half of postpaid ARPU, while a benefit is that customer acquisition costs are less for prepaid than for postpaid. Overall revenues were down slightly y-o-y due to the changing customer mix. T-Mobile USA ended the quarter with 33.5 million customers.
Slowdown at MetroPCS
MetroPCS’ stock was down nearly 30% today after the carrier posted 205,585 net customer additions for the second quarter, which was well short of expectations as well as the company record 684,000 net customer additions posted during the previous quarter. The company did manage to post growth y-o-y from the 183,000 customers the carrier posted during the second quarter of 2008. The carrier blamed the customer growth shortfall on increased churn, which jumped from 4.5% during Q208 to 5.8% this year. Also of note is that nearly all new customer additions came from new market launches in the Northeast. ARPU also sank about $1.50 per customer y-o-y, while the cost per gross addition jumped nearly $20 to $160, which the carrier blamed on the launch of new markets in the Northeast. Service revenues increased nearly $200 million y-o-y to $860 million during the quarter, but net income dropped from $50 million in 2008 to $26 million this year.