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.

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