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Company brags about its "momentum", but financials suggest otherwise

In its Q4 2012 earnings report Deutsche Telekom AG's (ETR:DTE) T-Mobile USA brags, "As T-Mobile USA, Inc. (“T-Mobile”) closed out its fourth quarter, the Company continued to generate business momentum by executing its Challenger strategy, while laying the groundwork for its unique ‘Un-carrier’ initiatives aimed at changing the rules of wireless."

But for all the talk of "changing the rules" and gaining "momentum", the actual numbers continue to look pretty grim.  For the quarter T-Mobile USA lost 515,000 contract customers.  Operating income (OBIDA) fell to $1B USD, down 25 percent from a year ago.  Total revenue fell from $5.2B USD in Q4 2011 to $4.9B USD.

Prepaid continues to be a strong point for T-Mobile, much like Sprint Nextel Corp. (S), but the addition of 166,000 prepaid customers in Q4 was not enough to stop the revenue bleed from defecting contract customers.

T-Mobile plane
[Image Source: Juergen Lehle]

One factor that may help T-Mobile is its pickup of the Apple, Inc. (AAPL) iPhone.  Some customers may be attracted to the prospect of the Apple device on T-Mobile's lower priced plans.

T-Mobile says that its merger with MetroPCS should be wrapped up in April.  The company can only hope that the merger with the more-successful budget carrier will provide it the spark it so desperately needs.

One big issue for T-Mobile is its lack of LTE.  Like Sprint, T-Mobile is stuck playing catch-up with respect to true 4G.  The company says it is "accelerating" its deployment and will cover 100 million Americans with LTE by "mid-2013".  It plans to cover 200 million Americans with LTE by the end of the year.

Source: T-Mobile



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RE: 3G????
By sprockkets on 2/28/2013 5:28:57 PM , Rating: 2
Their "4G" is just 3G at 10-44mbps. Basically the whole network is upgraded from the base 3G speed months ago.

I'm in a town where one side of it I got 300-500kbps down and 800 up and the other side I got 8000kbps down and around 1000 up.

Outside town? 2G to nothing.


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