T-Mobile Announces Third Quarter Results

T-Mobile announced their third quarter results this morning with  mixed results.  The good news?   They added customers and made money.  The bad news?  They didn’t add a lot of customers and they didn’t make as much money as we would hope.  T-Mobile added 137,000 customers to their base with service revenue of $4.71 billion, which was straight in line with last quarter.  A grand total of 7.2 million customers were using smartphones in the third quarter of 2010 compared to 6.5 million last quarter and 2.8 million in the same quarter of last year.  Total customer base is 33.8 million customers up from 33.6 million from the second quarter and 33.4 million from the third quarter of 2009.

We’ve included some of the data down below but hit up the link for the full read!

“The revenue trend in the third quarter showed continued improvement. Lower OIBDA was a direct result of the efforts to grow smartphone customers and higher investment in T-Mobile’s 4G network. These early investments will enable us to provide great customer experiences and allow us to scale our cost structure effectively as more customers utilize data services,” said Philipp Humm, CEO and President, T-Mobile, USA.

René Obermann, Chief Executive Officer, Deutsche Telekom, said, “I am very pleased with the development of blended data ARPU. Along with the growing number of smartphones, this demonstrates the potential of mobile broadband data growth in the US market and for T-Mobile USA in particular.”

Customers

  • T-Mobile USA served 33.8 million customers (as defined in Note 3 to the Selected Data, below) at the end of the third quarter of 2010, up from 33.6 million at the end of the second quarter of 2010, and 33.4 million at the end of the third quarter of 2009.
    • In the third quarter of 2010, net customer additions were 137,000, compared to a net decline of 93,000 in the second quarter of 2010 and a net decline of 77,000 in the third quarter of 2009.
    • Sequentially and year-on-year, the number of net new customer additions increased due primarily to higher net prepaid customer additions.
  • Contract net customer losses were 60,000 in the third quarter of 2010, compared to 106,000 net contract customer additions in the second quarter of 2010, and 140,000 net contract customer losses in the third quarter of 2009.
    • Connected device net customer additions, included within contract customers (as defined in Note 3 to the Selected Data, below), were strong in the third quarter of 2010, but were offset by traditional postpay and FlexPaySM contract net customer losses.
    • Sequentially, the decline in net contract customers was driven primarily by churn, as strong gross contract additions were more than offset by the impact from competitive intensity.
    • Year-on-year, net contract customer losses improved, driven primarily by improvements in traditional postpay customer gross additions.
    • Connected device customers totaled 1.8 million at September 30, 2010.
  • Prepaid net customer additions, including MVNO customers (as defined in Note 3 to the Selected Data, below), were 197,000 in the third quarter of 2010, compared to 199,000 net prepaid customer losses in the second quarter of 2010 and 63,000 net prepaid customer additions in the third quarter of 2009.
    • Traditional prepaid and MVNO customer additions drove the sequential increase in prepaid net customer additions compared to the second quarter of 2010.
    • Year-over-year, higher MVNO net customer additions driven by new partners were the primary reason for the increase in prepaid net customer additions. MVNO customers totaled 2.4 million at September 30, 2010.

Revenue

  • Service revenues (as defined in Note 1 to the Selected Data, below) were $4.71 billion in the third quarter of 2010, level with $4.70 billion in the second quarter of 2010, but down slightly from $4.73 billion in the third quarter of 2009.
    • Service revenues were level sequentially as lower voice revenues offset data revenue growth, driven by the adoption of mobile broadband data revenue plans.
    • Year-on-year, quarterly service revenues declined due primarily to fewer branded customers (wireless customers excluding MVNO and connected devices). However, the 0.5% decrease in quarterly service revenues year-on-year in the third quarter of 2010 was an improvement from the 1.4% year-on-year decrease in the second quarter of 2010.
  • Total revenues, including service, equipment, and other revenues were $5.35 billion in the third quarter of 2010, consistent with $5.36 billion in the second quarter of 2010, but down slightly from $5.38 billion in the third quarter of 2009.
    • Compared to the third quarter of 2009, the slight decrease in total revenues was due primarily to lower service revenues as described above.

Stick Together Highlights

  • T-Mobile USA’s HSPA+ 4G network (as defined in Note 11 to the Selected Data, below) now reaches more people than any other 4G network in the country reaching more than 75 major metropolitan areas across the country. T-Mobile USA is on track to reach 100 major metropolitan areas and 200 million people in the U.S. by the end of this year. An exciting line-up of products will be available to complement the network expansion.
    • T-Mobile USA unveiled the T-Mobile® G2TM with GoogleTM smartphone during the third quarter of 2010. The G2 breaks new ground as the first smartphone specifically designed for T-Mobile USA’s HSPA+ 4G network and is one of the first smartphones in the industry to offer the new Voice Actions feature of Google Search™, which allows voice control of the handset for completing common tasks. The T-Mobile G2 went on sale on October 6.
    • Also in the third quarter of 2010, T-Mobile USA revealed the first mobile tablet in T-Mobile’s AndroidTM portfolio, the Samsung Galaxy TabTM. A powerful entertainment device, the Galaxy Tab features a seven-inch touch screen, the Android 2.2 operating system, a front-facing camera for video chat, and a rear-facing camera for photos. The Galaxy Tab is expected to be available to T-Mobile USA customers this holiday season.
    • T-Mobile USA is also one of the two US launch partners of Microsoft’s Windows Phone® 7. In time for the holidays, T-Mobile USA will have two Windows Phone 7 devices, the Dell Venue Pro and the HTC HD7 that boasts the largest screen available on a Windows 7 smartphone in the U.S. with a 4.3-inch touch display.
  • The Android-powered T-Mobile myTouch® 4G, T-Mobile USA’s second HSPA+ capable smartphone, is built with families in mind and includes video with an HD Camcorder and face-to-face conversations through Video Chat. The myTouch 4G went on sale on November 3, 2010.
  • On October 19, 2010, T-Mobile USA announced the completion of its senior leadership transition by confirming Philipp Humm as president and chief executive officer effective November 1, 2010. Humm succeeds Robert Dotson, former president and CEO, who moves to vice chairman of the T-Mobile USA Board. Humm, an experienced DT executive and former CEO of T-Mobile Germany, was last responsible for sales and service in Europe as chief regional officer (CRO) Europe.
  • In the third quarter of 2010, T-Mobile USA partnered with Walmart to begin offering Walmart Family MobileTM powered by T-Mobile, a non-contract, unlimited voice and text postpay wireless product. The service, launched on September 20, 2010, is provided by T-Mobile USA over its nationwide network, and is sold exclusively by Walmart in nearly 2,500 stores. Additionally, T-Mobile USA began offering more places to purchase T-Mobile products and services as T-Mobile USA expanded into approximately 500 Target stores across the United States by the end of the third quarter of 2010.
  • T-Mobile USA was recognized by J.D. Power and Associates during the third quarter of 2010. On August 12, 2010, T-Mobile USA earned the highest ranking in the J.D. Power and Associates 2010 Wireless Retail Sales Satisfaction StudySM Volume 2, the third consecutive highest ranking for T-Mobile USA in that study. On September 9, 2010, J.D. Power and Associates ranked T-Mobile USA highest in the Southwest Region in their 2010 Wireless Call Quality Performance StudySM – Volume 2 and tied for the highest ranking in the Southeast Region of the United States.

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  • J-Hop2o6

    its ok.. i have a feeling Tmo’s Q4 will be much better.. and most their net customer gains was from pre-paid/MVNO gains.. they lost a net of 60K contract customers =(

    • http://tmonews.com rinklighter

      Ii wouldn’t say that’s ok. Contract customers–especially those with smartphone plans–is part of the Big Red and the Death Star bring home the dough. I agree with you that Q4 will be better. They’ve got the hardware (phones/network capabilities), now it’s time for them to step their game up with marketing.

      • J-Hop2o6

        i was being nice on the “ok” part.. but yea, the Big 2 really pulled them in for Q3.. sucks Tmo isn’t able to get net additions like them.. and yea, hopefully Tmo can pull in atleast 1M (i have a feeling 500K) for Q4.

    • ob18

      Maybe this new marketing strategy will payoff is new customer pay accounts.

  • Pimpstrong

    I wanna work for T-Mobile.

    • ob18

      What is stopping you?

  • mikeeeee

    his holiday season t-mo will trend higher.

    the demo they’re looking to cover is getting larger. and their penetration will get deeper.

    they also have an excellent array of hardware and plans to offer.

  • ob18

    In the words from the movie “What about Bob?” gotta take baby steps. If they can continue this type of marketing and consistent release of decent devices they may get to an area they are hoping for but they’ll have to keep their foot on the gas don’t even stop to waive.

  • http://soapboxuniverse.blogspot.com/?spref=gb Mr Cker

    It ain’t over. Go get em’ TMO! I want to know When do we get the Wifi GTab? How much will it be? Will WP7 offer tether support?

    Stay thirsty my friends!

  • ob18

    meh, the time it will take to lug around a tab i’ll just go get a small netbook and piggy back of a wifi.

  • TMoFan

    These numbers will only go up now that T-Mobile is aggressively advertising its 4G. I just listened to a Verizon commercial that mentioned the $15 for 150MB. Are they kidding? T-Mobile blows all of them out of the water. The only problem T-Mobile had was advertising it. That’s changing now and we’ll see a much different fourth quarter.

    • Ted C.

      Actually the big problem left for TMo is coverage. People pay for Verizon because they have great coverage. People pay for AT&T to get an iPhone… or at least they did. The iPhone has peaked so that’s less of an issue now. But coverage matters…

      • http://www.magicbluesmoke.org/ longcat

        Not only does Verizon have good coverage, they’re fast!

        In the financial district of Manhattan during peak hours (up about 15 floors), with T-mobile I could get about 50-70KB/s down and 150KB/s up. With AT&T I could get 200-300KB/s down and 40KB/s up. With Verizon my coworker got 300KB/s down, 80KB/s up. With Sprint I get 40KB/s down, 20KB/s up (if lucky) on 3G and 500KB/s down 128KB/s up with WiMAX. Sure these are just numbers but they do represent the difference in mobile browsing experience between carriers.

        How does Sprint manage so much worse using the same technology as Verizon? How does HSPA get so overloaded that throughput sinks pretty low? AT&T was pretty bad in Manhattan before they unleashed 850MHz and they’re actually not bad now. How does AT&T restore parity in service with Verizon of all things?

        I don’t know, but it would convince me to recommend Verizon if you’re ok with paying a premium for coverage, and capacity.

        • HowdyDoody

          Before HSPA+ I had a similar problem in Houston. would easily navigate at 3Mpbs at home. But the moment I go near downtown at peak hours or near a college, could barely make 100Kbs work.

          Since they’ve added HSPA+, the worst I do is 4Mpbs any time of day. The service quality has improved significantly.

          Cellphone coverage in the eastern states and midwestern states is great, actually better than Sprint or ATT (no matter what ATT has to say. I can prove this, cause work provides an ATT BB which rarely has coverage or can keep a connection going, I rely on T Mob because it actually works. Now my GF has a Sprint phone and her coverage where ever we went this year was AWFUL, except Northern Wisconsin, where she had coverage and I didnt with either GSM phone,.

          Network coverage, as long as you are in a large Metro Area, T mob works wonders, the moment you leave town you end up with G connections or sometime Edge, this is where all others blow T Mob away. But overall I am happy with there service and it works better than my company phone.

          So would I recommend T Mob, its simply the best bang for the buck. Verizon is just absurd, its amazing how many people used it when its service isnt that much better, even though many like longcat above me beg to differ.

          I actually have had access to all four providers in 30 some states over rural and metro areas this and last year. And used them. My GF is convinced as well, and she is bailing out of Sprint. why, Cause it actually works better for less.

          Will T Mob be like the big guys, if they really want to grow, the only thing they have to do, is avoid bloatware. They have the network and they have the phones. Now, more advertisement like the ones shown and better phones (please no iPhone) and they will grow bounds and leaps.

          If they really want to change perception, provide HSPA+ on all Iterstate roads and their fate will change.

        • Jakestylez

          yea its true that tmobile is cheaper all around, but the truth is that they have a bad rep with service, as a previous customer with tmobile i was always happy with customer service and pricing of tmo but the reception was horrible, verizon has way more nationwide coverage and altho they may be more, people will always pay for good service. 2 incidents personally happened with me with tmo. One time i was driving 20 mins down the street from my house and had sos the entire time with my bb. Also another time driving home on a major highway i droped 7 calles in 15 mins. To me that is just rediculous. i would never go back to tmo just for those 2 cases. tmo is catchingup ill give them that and they do blow away pricing but even nowadays with the new g2 mytougch slide 4g and other new and improved android phone im just not attracted to any of the phones they have to offer

  • ItsMichaelNotMike

    Well IMHO these numbers are impressive considering the economy and carrier war going on.

    Staying the same would have been a significant feat in these times, so to gain over 100,000 customers, congrats T-Mobile.

    Of course the real number deal with how much did it cost T-Mobile to get those customers. For example, I assume the wallet takes a hit on “all phones for free” days and BOGO promotions.

  • tipsofme

    The new CEO will change everything. He already is, just hold on tight and enjoy the ride. Its going to be epic.

  • http://tmonews.com terryjohnson16

    If they stopped trying to copy the big people with their fees and upcoming charges, people wouldn’t get mad and leave.

    T-Mobile’s number #1 Kryptonite is the iphone. Plain and simple. A lot of customers left, for the iphone 4. Even T-Mobile admitted that, the iPhone is hurting them as long as they don’t carry it.

    • HowdyDoody

      Its good they don’t iPhone is OLD tech, and the fact that Android outsold iPhone 2 to 1 the last quarter, shows that customers are coming to terms with this. May have hurt them in the past.

      If they provide phones of equal quality and value as Verizon and Sprint, the iPhone is irrelevant.

      Iphone in Verizon will gain some market share, but because its development cycle is soo long and the fact that only 8% of developers (me among them) consider it a viable option from here on, we are dropping development on it. So going forward, it going to keep on lagging even more!