T-Mobile Announces Q4 2011 Results, Loss of Over 700,000 Customers
February 23, 2012 5:25 PM
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T-Mobile USA CEO Philipp Humm says the loss of customers is due to the lack of an iPhone 4S to sell
T-Mobile was hit pretty hard in fourth quarter 2011 with the loss of over 700,000 customers, which was attributed to the fact that
is the only carrier that doesn't offer the iPhone 4S.
T-Mobile is trailing behind the United States' three largest mobile carriers, Verizon, AT&T and Sprint. All three of these carriers sell the iPhone 4S, but T-Mobile does not. According to Philipp Humm, T-Mobile USA CEO, this is the reason for many of the contract deactivations in Q4 2011.
By the end of Q4 2011, T-Mobile had 33.2 million customers, which is a decrease from the 33.7 million customers it had at the end of Q3 2011. The carrier lost 706,000 customers total.
T-Mobile has wanted to carry the iPhone 4S in order to
for some time now, but Apple executives have a problem with the spectrum band which T-Mobile's network operates in.
In addition to iPhone-related woes, T-Mobile USA reported service revenues of $4.57 billion in Q4 2011, which is a decrease from $4.69 billion in Q4 2010. Also, net customer losses were 526,000 in Q4 2011, which is an increase from 23,000 in Q4 2010.
Despite some disappointment, T-Mobile highlighted a few positives from the Q4 2011 results, such as an adjusted OIBDA increase of 4.3 percent year-on-year to $1.4 billion.
“In 2011, T-Mobile USA showed solid financial performance with a remarkable adjusted OIBDA turn-around in the second half of the year, despite nine challenging months during the pending acquisition. We further increased our 4G data speed to 42 Mbps, expanded our sales channels, launched 25 new 4G handsets and significantly improved our operational efficiency. As a result, adjusted OIBDA rose again year-on-year in the fourth quarter of 2011 and branded data ARPU grew 20 percent year-on-year as smartphone adoption accelerated,” said Humm. “However, not carrying the iPhone led to a significant increase in contract deactivations in the fourth quarter of 2011. In 2012 and 2013, T-Mobile USA will invest to get the business back to growth, including an incremental $1.4 billion investment in its network modernization initiative, which will total a $4 billion investment over time.”
T-Mobile also mentioned that it will finally be rolling out a
, which Verizon, AT&T and Sprint have either launched or are preparing to launch. T-Mobile's LTE network will be built using the $1 billion worth of spectrum and $3 billion in cash from
the failed AT&T merger agreement
, where AT&T wanted to acquire T-Mobile for $39 billion last year. However, the Federal Communications Commission (FCC) and the Department of Justice had an issue with anti-competitive practices.
T-Mobile's LTE network is expected to begin development in 2013.
AT&T and Verizon will be ahead of the curve
as far as both LTE and Apple products go, since the iPad 3, which will be revealed at an event next week, will run on both of the carriers' LTE networks.
“Though we are not satisfied with the contract customer losses and the decreased total revenues, the quarterly margin improvement year-on-year was impressive," said René Obermann, CEO of Deutsche Telekom. "The spectrum gained through the break-up fee empowers T-Mobile USA to start LTE-based services in key US markets and strengthens its competitiveness."
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Subsidizing is anti-competitive
2/24/2012 12:47:38 PM
This is a good example why subsidizing is anti-competitive. Apple won't make a product everyone wants for T-Mobile but will for everyone else? Why is this? Not a big enough customer base? That's nuts. Subsidizing phones gives consumers less choice and once they make a choice forces them into a narrower decision.
Heck, government subsidizes are one of the most criminal and anti-competitive actions around and I am surprised those are allowed(corruption allows them to continue)..
I wish we could ditch the subsidies and separate the phone purchase from the carrier decision...
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