T-Mobile USA Reports First Quarter 2012 Financial Results

T-Mobile USA issued their Q1 2012 earnings report today along with parent company Deutsche Telekom and surprisingly declared a new increase of 187,000 customers. That number is fairly notable as last quarter saw T-Mobile report a net loss of 526,000 customers and a losses of 99,000 customers in the third quarter of 2011. T-Mobile attributes the growth to increases in prepaid users that helped offset the loss of more than 510,000 contract customers.

T-Mobile’s total revenues reached $5 billion in the first quarter, a 2.8% decline from the fourth quarter of 2011, and a 2.5% drop from the same period one year ago. Compared to the fourth and first quarters of 2011, total revenues changed primarily due to branded contract customer losses. Additionally, equipment revenues increased year-on-year, partly due to stronger smartphone sales and handset program changes in connection with T-Mobile’s Value Plan program.

Total customers served stands at 33.4 million at the end of the first quarter, compared to 33.2 million at end the of the fourth quarter 2011, and 33.6 million customers at the end of first quarter 2011.

“In the first quarter, T-Mobile USA delivered strong performance across several key metrics – adding customers, increasing branded ARPUs year-on-year and effectively managing costs to deliver a solid adjusted OIBDA margin. While branded contract churn remains a focus, in the first quarter of 2012 we achieved our lowest level in seven quarters,” said Philipp Humm, CEO and President of T-Mobile USA. “In just a short time since the December breakup of the AT&T deal, T-Mobile USA has redefined and restarted our Challenger Strategy including phase one of a major brand re-launch to redefine T-Mobile in the marketplace.”

T-Mobile USA Challenger Highlights

T-Mobile USA has made considerable progress in executing against the reinvigorated Challenger Strategy, which was announced in February 2012.  Most significant is progress against the newly announced $4 billion network modernization and 4G evolution effort, which will further improve existing voice and data coverage and pave the way for long term evolution (“LTE”) service in 2013.  Already this year, T-Mobile USA has entered into a spectrum exchange agreement with Leap Wireless International, Inc. and secured key AWS spectrum licenses from AT&T, which were agreed to as part of the breakup of the proposed merger between the two companies.  More recently, T-Mobile USA signed agreements with Ericsson and Nokia Siemens Networks to deploy state-of-the-art LTE-capable equipment at 37,000 cell sites in 2012 and 2013.

Other investment areas core to T-Mobile USA’s Challenger Strategy include continued retail expansion as well as an increased investment in the brand. So far this year, the Company has expanded its branded distribution, adding 115 new branded dealers and earned Wal-Mart’s 2011 “Supplier of the Year” award in both the Wireless category and the overall Entertainment Division.

The company also unveiled phase-one of a brand re-launch program, introducing a new ad campaign that encourages customers to Test Drive T-Mobile USA’s competitive 4G experience.

Additionally, the Company continued to expand its portfolio of compelling 4G smartphones in the first quarter. T-Mobile USA became the first U.S. carrier to offer a Nokia Windows® Phone, the affordable, 4G-capable Nokia Lumia 710, and launched the 42 Mbps-capable Samsung Galaxy S® Blaze™ 4G.  In April 2012, T-Mobile USA launched the 42 Mbps-capable HTC One™ S.


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    Contract customers or not it is a step in the right direction. And we still posted a profit. This is good news. Lets see if we can keep it going.

    • xmiro

      I hope Tmo does. 1900Mhz for iPhone may help, especially with the great plan choices available + unlocked iphones sold by Apple

  • tmoEmployee

    as an tmobile employee i bet we could sell 510k iphones for upgrades thats pretty much the bulk of customers leaving. day in and day out i see customers who have had tmobile some 8+ years and they say they are leaving for the iphone.

    • Mike in FL

      Which is why T-Mobile NEEDS to get access to this device.

      • Cashman

        That might help, but how many people are willing to buy the phone at full retail cost to use it with T-Moblie

    • LC

      We could sell that many iPhones, and T-Mobile would still lose money on each and every one of them.

      • tmoEmployee

        Most of our sales are value plans the customer pays the full price of the phone.! We would be in a better situation than sprint


      T-Mobile does not need to pay to get the Iphone they have over 1 million on their network now.
      Next year any unlocked gsm phone will work on the network at full speeds ATT phones. Iphones etc.
      The updated network will be the most advanced and fastest in the USA.
      Go T-Mobile!!!!!!!!!!!!!!

  • TMoFan

    Not too horrible, but the post-paid is terrible. T-Mobile will do just fine with the rebrand and refarm and when the
    refarm is complete I bet we’ll finally see churn start to decrease. If
    they make a foolish attempt to buyout Metro it would only impede this
    plan and would be a huge mistake. Focus on LTE, focus on refarm and
    advertise that fact, focus on growing post-paid. We need no distractions that would take the focus away from those things.

    • Vic

      Advertise refarming? I’m assuming you mean something along the lines of fliers and web advertising telling people they can bring over their iPhones from AT&T to T-Mobile and get 3G.



        • perfectalpha

          Next one will offer LTE. Watch the huge sales the 5 generates.

        • So they can sit on top of the world for a month or 2 until Android snuffs them out again for the rest of the year.

        • perfectalpha

          Even in Q1, they were still the top selling phone on every individual carrier in the US except TMO of course. It may not be able to keep up with Android for sheer volume because folks unfortunately go to the store and buy devices like the Gravity Smart and Sidekick 4G, but in the profit and high end game nothing competes with the iPhone at this point.

        • kalel33

          The profits are for Apple, not anyone else.

        • Vic

          The iPhone is 850/1900MHz 3G (US). T-Mobile operates 3G on AWS (1700/2100), but is in the process of refarming to have 3G available on 1900MHz. As of right now, if you bring an iPhone over to T-Mobile, you’re most likely stuck with 2G/Edge speeds, so advertising that people can access 3G on TMO with the iPhone would be valid when the refarming is completed.

  • Nate331

    Even though T-Mobile has better phones, the iPhone, like it or not is what brings people to the stores. Sprint may be hurting right now for mortgaging its immediate profits for getting the iPhone but they will be stronger a few years from now.

    • Kristin

      Not sure if u pay attention to sprints financials but they are not in good shape at all and will probably be getting rid of their CEO and filing bankruptcy again. Sprints winmax is pretty much maxed out far as speeds we will see how good the iPhone deal was for them. Me thinks not enough subscribers are being added to offset what they are paying apple yet. I’m hoping Tmo doesn’t give in and pay apple an outrageous amount just to have the iPhone sold at Tmo stores.once Tmo reframing starts I’ll be able to get faster speeds on my factory unlocked iPhone 4s update the software without any worries

      • ChadBroChillz

        When did Sprint file Bankruptcy? Also if you were paying attention you would realize that Sprint is not going bankrupt. in Q4 40% of Sprint’s iPhone sales were to new customers. in Q1 it grew to 44%. They are losing less money now than before. They are still going to be losing money for a year or so, but after that they will have a new nationwide LTE network with the iPhone, which will attract many new customers who do not want to pay crazy prices with ATT/Verizon or do not want to be limited.

        Also Sprint never controlled wimax, That was controlled by Clearwire, and Clearwire is moving to TD-LTE, and has already seen speeds in the 90s using a 20mhz configuration.

        • kalel33

          Who owns 54% of Clearwire? Sprint.

    • Freak4Dell

      The question is whether they can get to the point where they’re stronger at all. Even with the iPhone, they’re losing postpaid customers. Just like T-Mobile, Sprint’s gains are all in the prepaid area. They simply can’t hold onto the Nextel customers. The prepaid brands don’t offer the iPhone, so the iPhone really isn’t doing much for Sprint. In the first quarter, they still lost over 800 million, and they’ll continue to lose giant amounts of money as they move forward with Network Vision. Sprint isn’t expected to post a profit until at least 2015, and a lot of people are pushing that even further to 2016 or 2017 now.

  • Miltochezchelios

    Well if the employee says we can sell all those iphones just on upgrades I say hes right working in the front line he sees what customer want. The refarming will help with the iphone but only for the more tech savy people. Theres ALOT of lazy people not willing to go through the unlock phase of the process just to get a cheaper plan. They rather have it handed to the at the store along with a monthly $110 bill. Gooday

  • James

    T-mobile sales associates sell and activate prepaid kits even when customers do not want or ask for them, it is a way of increasing traffic conversion-which they are judged upon.
    In other words, managers yell at reps when they have customers walk in but not activate pre or contract accounts, so the reps activate prepaid even when customers are just buying a phone.
    So I can not believ prepaid numbers…Sorry Most are just Fraud by employees to keep their jobs

    • LC

      Wow, nice blanket statement. Don’t know what kind of world you’re living in. You should probably figure out what you’re talking about before you go of saying ridiculous things like that.

      • james

        easy answer, worked in stores for years at t-mo, and saw ten fake prepaid for every real one, almost every day. Sorry, but it is true.

    • el guru

      Lol… Wow seriously? Ill sit here and assume your doing that plus the numbers arent totally inflated. Another thing they already have reports on non usage prepaids and second third month refill. But the refills doesnt justify much with the high tourist stores dishing 1100 prepaids a month.

    • So his opinion is invalid just because it’s unethical? I’m inclined to believe something in between the extremes.

    • 21stNow

      Thanks for exposing this. I wanted a SIM card only in a pinch. At more than one location, the T-Mobile store wouldn’t sell me a SIM card without activating a prepaid plan. I wanted to pay the $10 for the card and go, but they “couldn’t do that”.

    • James is 100% correct about this. As a former Sales Rep I saw this happen all the time and even did it a few times myself. Was it right? No. But, when you need to make certain numbers and people aren’t coming in the door you do what you have to do. I’ve seen reps activate prepaid service and pay for it themselves just to be sure they made their numbers. Its all a crock of shit. The post paid losses show the direction T-Mobile is heading. Its sad too because I love T-Mobile, but in order for T-Mobile to turn it around they are gonna have to stop blaming the reps and start blaming the people in charge. District managers, regional managers and even CEO’s are gonna have to start taking the blame because ultimately they are the ones that are making all the decisions that are affecting T-Mobile and its business.

  • clagg

    it’s not 2008 anymore and people using iPhones need to realize that not everyone wants an iphone. If getting the iPhone will bring more costumers, but cost will be so high that they wont have funds left for network upgrades or marketing then is not worth it. As you can see they have managed to make a profit without the iPhone, and LTE (not in the iphone) will be for sure in 2013. Sprint was really stupid. And whats up with apple and all that crap that they believe what they have is better and superior to charge insane amount of money for a phone! Oh thats right they are loosing market share and that means selling less iPhones meaning wrong strategy.

  • MSalam11
    • Come on, we posted this already, why do people link to alternative sites for articles we’ve already posted?

      • MSalam11

        Sorry, didn’t see it!

  • Olber Ramirez

    the first quarter for tmobile is always high because the iPhone was release last year but wait until the new iPhone is release and then we will see what damages are .

  • How can you even count pre-paid? I’m willing to bet they fudge the numbers big time. Let’s go ahead and count someone who signed up for some prepaid time a couple months ago as a current customer. They’ll keep coming back, I swear.

    I love T-Mobile but I’m still not comfortable with their prognosis.

    • mloudt

      your a dumbass if it wasn’t for prepaid you idiot t-mobile would really be hurten. t-mobile has about 8million prepaid subscribers the other 26.4 million are value and classic contract plans. do the math stupid if you add prepaid with contract customers then you get t-mobile usa’s total customer base that is why prepaid is included. god you are one dumb ass t-mobile loss 510,000 postpaid subscribers so that means since they added 187,000 customers the prepaid division sold more to offset the postpaid loses. which means over 600,000 people signed up for t-mobile prepaid dumb ass.

      • kalel33

        I wouldn’t call anyone stupid or a dumbass with your level of grammar and spelling ability.

      • Wow guy, I bet you feel better after your rage fest there.

    • extmobile

      funny i am a ex employee of this horrible company and yes in deed they flip the prepaid when the customer shows up in the store to pay the prepaid bill

  • It’s pretty simple where T-Mobile fails. It’s not the lack of the iPhone; it’s lack of brand recognition. Sure, they’ve tried, just not very hard.

    MyTouch was their answer to this. It doesn’t, and never will, have a ring to it. (The name actually sounds very creepy.) The MyTouch phones are also usually too different from other Androids to stick (Espresso UI instead of standard Sense which might attract some former HTC users from other carriers, if for no other reason than the user experience being familiar to them).

    HTC One S, while solid in ways, will not be their savior. There’s no brand there.

    Verizon continues to win because they focus on this. Droid this, Droid that. Incredible. Rezound. They choose memorable names that stick with people. Oh, and they have the iPhone, too.

    Sprint has the Evo and sticks with it. AT&T has Inspire. Captivate. Infuse. Atrix.

    T-Mo needs to fire some higher-ups and shake things up a bit.

    • And since Douche Telecom (see what I did thar?) is dropping T-Mobile USA like a bag of horse dung, why not drop the name entirely? Just like VoiceStream turned into T-Mobile, maybe it’s time for something else. Slapping some leather on Carly isn’t changing your image any. Change the name, get rid of the pink, get some serious brands, and things will change for the better.

  • nd5

    Hey T-Mobile, you want to reduce contract churn? Your customers have spoken, maybe it’s time you listened to them… ya think? Everything you need to know to grow is voiced here on tmonews every day….

    1) You need top flight phones… i.e. Galaxy Note, One X, Lumia 800/900 and yes, even the iPhone. These are the phones that your customers are leaving for. You give us um… none of the above.

    2) Show your existing contract customers some real upgrade love. Give us the same pricing for upgrades that new customers get. How about some “early upgrade” special events for existing customers with > 18 months of contract tenure.

    3) Build out your network so you have more complete coverage. And move as fast as you possibly can on your refarming & LTE efforts.

    4) How about focusing less on your competition, and selling yourself directly to customers. Geico/Progressive ads tell me that they save me $437/year on car insurance. What are you doing for me? While I will never, ever, ever complain about having Carly in a commercial, I could really care less that your motorcycle is faster than AT&T’s. That just makes me want a cool bike, not a T-Mobile phone.

    • TMCraver

      Building out coverage should be number 1 going from 4G to G in rural areas sucks when verizon had 3g in these same areas.

    • Derp Deplume

      You cut the check for 3 Billion and I’m sure T-Mobile would get the iPhone.. Cuz that’s what they want from T-Mobile now.

      Yes.. that’s how much Apple wants from DT to spin up an “official” T-Mobile iPhone.

      ” That just makes me want a cool bike, not a T-Mobile phone.”

      Yea I have to agree with you here.

  • qpinto

    Tmobile is working in the right direction. i have many friends that are thinking of moving away or moved away in favor of the ifruit. with the refarm, peopke will buy unlocked iphones and be happy. it will be an easy strategy for tmobile to implement, and NOT spend 15.5 billion dollars over the course of 5 years like sprint.

    i will agree, that people are complaining about whats the next cool phone to buy at tmobile? There is too much of a delay within device releases. I finally saw the fast song commercial on TV. however it doesnt bring the awe and shock factor that the original DROID commercials did. I currently have a rooted G2x, but Tmobile doesnt offer anything that seems worth it to me to upgrade from my G2x.

    The HTC one S(April 25)
    Samsung Galaxy Blaze (March 21st)
    Nokia Lumina 710 (Janurary 2012)
    HTC Amaze 4G (October 2011)
    Samsung Galaxy S 2 (October 2011)

    as a customer, i dont see any reason to buy a new phone. there isnt any incentive. there isnt any device on tmobiles network that i can go into a corporate store and buy from that i want and need it now kind of mindset. when was the last time you heard of anyone raving over a tmobile phone and i gotta get it now? I hear this from the ifruit crowd, people with DROID brands, people that want the Evo’s. But i dont see anything on tmobile that carries that kind of talk amongst peoples. Perhaps if TMobile started to actually advertise the HTC one s and show everything i can do with a couple of commercials, talk will get started.

  • Guest

    People stop with the iPhone talk! The subsidies are hurting Sprint and Verizon reps are pushing Android because the subsidies cost them less. Once the refarm is complete the strategy is real simple. Have a link to the Apple store where a walk in customer can buy the factory unlocked iPhone and have them sign up for a value plan. Then have a flyer with the savings between ATT and T-Mobile plan. Boom done. T-Mobile doesn’t have have to spend a ton of cash to get the stupid iPhone. Target is already offering the iPhone at $50 less than other outlets. That should tell people something about how well that phone is selling.

    • ChadBroChillz


      iPhone is a seller on any carrier. Tmobile’s plan is smart, but I am not sure how many people are willing to shell out 600+ on an iPhone just to jump into a value plan contract. I am sure they will sell the iPhone in the future, but until then, this is a smart plan. Building out their challenger strategy should be priority one.

    • Gouv

      It’s really not that simple lol. It’s going to take so much more to fix tmo.

  • Bratty

    Sprint posted a NET GAIN of 263,000 post-paid subscribers last quarter. You can look up what they attributed that gain too.

    • kalel33

      It’s the same answer to why they’re losing money too. Double-edged sword. They had a net loss of $256 MILLION last quarter.

    • Freak4Dell

      Sprint has added about that same amount of customers to the Sprint platform pretty much every quarter, even before the iPhone. They can’t stop the masses of Nextel customers that are leaving, though, and the iPhone is not making up for that. What they don’t tell you is that the 263,000 figure includes the 227,000 Nextel subscribers that converted from Nextel to Sprint, so they really only got 35,000 postpaid additions (ones that came from a non-Sprint brand).

      The iPhone is certainly an excellent way to draw customers to the stores, but the money it costs to subsidize that thing is not looking like it’s paying off for Sprint, at least not yet. T-Mobile does have two advantages over Sprint right now. T-Mobile’s network hasn’t imploded and slowed to a snail’s pace, and the prices are lower. However, their coverage is still weaker than the big 2, and they’ve got a bad image associated with their network. There’s no doubt that the iPhone would bring in customers, but the question is whether the extra customers will offset the cost of getting the device.

      • ChadBroChillz

        The 263,000 figure was NET Postpaid, and nextel customers are considered postpaid. iDEN boost mobile are considered prepaid.

        Also about Nextel, They are paying for that network to stay up and running for just 5 million customers. That is a huge burden on them. That is causing a good amount of their losses. Also before the iPhone, they were only keeping around 20-30 percent of nextel customers that were leaving, now that number is up to 46%. iPhone is helping them a lot.

        It will offset the cost, because on wimax devices, the 10 dollar fee goes to clearwire. They have a deal with clearwire that every wimax device has to pay a fee to get access to their network. The iPhone being a non wimax and still charging he 10 dollar data fee means that 10 dollars goes to paying back the subsidy.

        • Freak4Dell

          I’m taking it from their own press report. The 263,000 was for the Sprint platform, and they included the 228,000 customers that moved from the Nextel platform to the Sprint platform in that figure. It’s not a net figure for the entire company…they split it up into platforms to make it look better.


          Like I said, the iPhone definitely helps, but Sprint has yet to prove that it was worth the enormous expenditure. With the iPhone being available on 3 of the 4 major carriers, and at least one regional carrier, people don’t have much reason to switch carriers anymore, even with the unlimited data that Sprint offers. An iPhone isn’t going to save Sprint from their problems with their terrible network. In fact, churn was higher for the quarters with the iPhone than it was before. When you have 2 carriers that have decent networks that also carry the iPhone at a cost that’s very similar to what Sprint charges, there’s very little reason to go with Sprint. If T-Mobile can commit the money for the iPhone and keep spending to upgrade the network at the same time, then by all means, they should go for it. My worry is that they can’t handle both of those multi-billion dollar projects at the same time, though. If they put off network enhancements, they’ll end up in Sprint’s position in a couple of years (financial position, not number 3 carrier position).

  • Larry

    T-Mobile is just full of outright lies…They do nothing for longterm customers except extend contracts on all lines without a clear anwser. No good uprade allowed. The only thing they are good for is no contract service and very sub par service. Have had T mobile family plan for ten years and they get worse and worse. I am hoping to read one day T Mobile is dead in the water.
    Even though they tought their new OneS it in no way compares to the OneX on ATT …

  • Larry

    T-Mobile is just full of outright lies…They do nothing for longterm customers except extend contracts on all lines without a clear anwser. No good uprade allowed. The only thing they are good for is no contract service and very sub par service. Have had T mobile family plan for ten years and they get worse and worse. I am hoping to read one day T Mobile is dead in the water.
    Even though they tought their new OneS it in no way compares to the OneX on ATT …

  • Gouv

    They can’t be happy to replace contract customers with prepaid. That’s awful !!! I imagine this will hurt them in future quarters.

  • LanceMiller

    I nominate “nd5” as CEO.!!