T-Mobile: Churn's up from a year ago

Still, fourth-place T-Mobile is adding customers as third-place Sprint is losing them. Can the well-received MyTouch 3G improve T-Mobile's numbers?

This was originally published at ZDNet's Between the Lines.

T-Mobile said Thursday that it added 325,000 net customers in its second quarter, but a contract churn rate of 2.2 percent, up from 1.9 percent a year ago is a trouble spot. T-Mobile said that its new Android-powered MyTouch 3G and a distribution pact with Radio Shack gives it "opportunities for new growth."

T-Mobile, the U.S. mobile unit of Deutsche Telekom, ended the quarter with 33.5 million customers, good for fourth place among carriers. However, T-Mobile is adding customers as third-place Sprint is losing them .

Among the more notable second-quarter figures released by T-Mobile (statement):

• The company reported net income of $425 million in the second quarter, down from $452 million a year ago. Revenue was $5.34 billion, down from $5.47 billion a year ago.

• Net customer additions of 325,000 was off the pace of 415,000 in the first quarter and 668,000 in the second quarter a year ago.

• Contract customers were 81 percent of T-Mobile's customer base.

• Contract churn in the second quarter was 2.2 percent, down from 2.3 percent in the first quarter. In the year-ago quarter, T-Mobile's contract churn was 1.9 percent. Blended churn--including prepaid and contract customers--was 3.1 percent, up from 2.7 percent a year ago. Blended churn was hit by "competitive intensity."

• Average revenue per user was $48 in the second quarter, down from $55 a year ago.

What remains to be seen is whether the well-received MyTouch 3G can improve T-Mobile's metrics. Competition remains fierce and Verizon Wireless is expected to enter the Android-powered handset market in the fourth quarter with Motorola.

About the author

    Larry Dignan is editor in chief of ZDNet and editorial director of CNET's TechRepublic. He has covered the technology and financial-services industries since 1995.


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