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T-Mobile Announces Fourth Quarter 2011 Financial Results, LTE Network Coming In 2013

Early this morning T-Mobile USA announced their first earnings report since the AT&T merger fell through and noted a loss of 802,000 customers in the fourth quarter. That’s the bad news and we know, it’s pretty bad. The good news is that thanks to the AWS spectrum T-Mobile received from termination of the AT&T deal, T-Mobile will launch their LTE service in 2013. Additionally, T-Mobile will spend $4billion rolling out HSPA+ on their 3G/4G services on the 1900 MHz band to allow for high-speed access for previously unsupported device…cough iPhone cough.

T-Mobile CEO lays the blame of subscriber losses on the iPhone when he says: “not carrying the iPhone led to a significant increase in contract deactivations in the fourth quarter of 2011.”

For now, T-Mobile is continuing to announce strength in their prepaid areas with an additional 276,000 customers signing up during the same timeframe. Here’s the critical quote from the press release regarding refarming the network and LTE:

T-Mobile USA announced it will invest $4 billion in total to strengthen its 4G network by installing new equipment at 37,000 cell sites and deploying HSPA+ in its PCS (1900) spectrum band. This spectrum re-farming effort, combined with the AWS spectrum T-Mobile USA will receive due to the termination of the AT&T transaction (subject to FCC approval), will allow the deployment of long-term evolution (LTE) service on AWS spectrum in 2013. This anticipated network transformation will significantly enhance coverage and performance for customers.

So yeah, this isn’t exactly good news, but it’s coupled with good news in the announcement that T-Mobile will definitively go LTE and in the meantime continue to strengthen their already competitive HSPA+ 42Mbps network. The refarming news regarding the 1900 MHz band is great news for iPhone customers who will want to take advantage of a network that doesn’t suffer the same kind of congestion AT&T does along with cheaper data plans. Yes, you’ll have to secure your own equipment, but in the long-run, are less expensive data plans and a better network worth it?

Check out the full financial breakdown in the press release below:



Bellevue, Wash. — Feb. 22, 2012

2012-02-23 07:51:33

Strong adjusted OIBDA and prepaid performance; contract business negatively impacted in the fourth quarter of 2011 by iPhone 4S launches by three nationwide competitors

T-Mobile USA, Inc. (“T-Mobile USA”) today reported fourth quarter 2011 results and provided an update on its annual assessment of indefinite-lived assets recorded in its financial statements. In the fourth quarter of 2011, T-Mobile USA reported service revenues of $4.57 billion, down from $4.69 billion in the fourth quarter of 2010, and adjusted OIBDA of $1.40 billion, up from $1.34 billion reported in the fourth quarter of 2010. Blended ARPU in the fourth quarter of 2011 was $46, consistent with the fourth quarter of 2010. Additionally, net customer losses were 526,000 in the fourth quarter of 2011, compared to 23,000 net customer losses in the fourth quarter of 2010.

“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 Philipp Humm CEO and President of T-Mobile USA. “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.”

“Though we are not satisfied with the contract customer losses and the decreased total revenues, the quarterly margin improvement year-on-year was impressive. 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,” said René Obermann, CEO of Deutsche Telekom.

Total Customers

Contract Customers

Prepaid Customers


Adjusted OIBDA




Capital Expenditures

T-Mobile USA Recent Highlights

T-Mobile USA is the U.S. wireless operation of Deutsche Telekom AG (OTCQX: DTEGY). In order to provide comparability with the results of other US wireless carriers, all financial amounts are in US dollars and are based on accounting principles generally accepted in the United States (“GAAP”). T-Mobile USA results are included in the consolidated results of Deutsche Telekom, but differ from the information contained herein as, among other things, Deutsche Telekom reports financial results in Euros and in accordance with International Financial Reporting Standards (IFRS).

This press release includes non-GAAP financial measures. The non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information provided in accordance with GAAP. Reconciliations from the non-GAAP financial measures to the most directly comparable GAAP financial measures are provided below following Selected Data and the financial statements.

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