Prepay powers T-Mobile USA’s Q3 growth: No. 4 national carrier rounds up 857,000 net adds

T-Mobile USA Inc. added 857,000 net subscribers to its network during the third quarter, numbers primarily driven by the carrier’s prepaid offering. The carrier had added 802,000 net subscribers during the third quarter of last year, but a higher percentage of them were signed to contracts.
About 35% of T-Mobile USA’s net additions during this year’s third quarter were prepaid, compared with just 4% in the third quarter of 2006 and 20% in the second quarter of this year. The wireless operator said that its July launch of FlexPay, which expanded pay-as-you-go options for prepaid customers as well as those on contracts, helped drive the growth of its prepaid service during the third quarter, particularly among Flexpay customers without contracts.
T-Mobile USA said that contract customers made up 84% of its subscriber base at the end the third quarter; the company had 27.7 million total customers on its network.
T-Mobile USA’s average revenue per user was up $1 year-over-year to $53, and it cut its postpaid churn rate from 2.3% in the third quarter of 2006 to 2%. The company’s overall churn rate was also down slightly, from 3% during the year-ago period to 2.9% this year.
Total revenues were nearly $5 billion, and the company reported profits of $526 million. That figure was down from the $1.79 billion profits in the third quarter of last year, which was boosted by a $1.5 billion income tax credit during that quarter.
With quarterly results from all four national carriers now in, AT&T Mobility led the pack with 2 million net customer additions and retained its place as the largest U.S. carrier, followed by Verizon Wireless with 1.6 million net additions. No. 4 carrier T-Mobile USA surpassed Sprint Nextel Corp. in terms of net additions for the quarter as the third-largest national carrier posted a loss of 60,000 customers.