T-Mobile USA's revenue, profit slide
Carrier attributes dip to its efforts to attract smartphone customers through heavy subsidies of devices and to build up its 4G network.
T-Mobile USA endured a somewhat disappointing third quarter.
In the quarter, the wireless carrier generated $5.35 billion in revenue, representing a slight decline from the $5.38 billion it tallied during the same period in 2009. T-Mobile's profit in the most recent quarter was $320 million, down from $417 million a year ago.
According to T-Mobile, the company's operating income of $1.32 billion before interest, depreciation, and amortization was lower in the third quarter compared with last year's $1.56 billion as a "direct result of the efforts to grow smartphone customers and higher investment in T-Mobile's 4G network," CEO Philipp Humm said today in a statement. Its efforts to attract more smartphone customers included spending more money on handset subsidies.
Humm said that such investments will help the company "scale [its] cost structure effectively as more customers utilize data services."
The No. 4 U.S. carrier added 137,000 net customers in the quarter, bringing its total subscriber base to 33.8 million customers. The company attributed that growth mostly to prepaid customers. Still, the figure beats its counterpart from the same period last year when T-Mobile saw a net decline of 77,000 customers.
On an upbeat note, about 7.2 million of T-Mobile's customers were using smartphones in the third quarter, compared with 2.8 million in the same period a year ago.
The churn, or loss, rate among contract customers was 2.2 percent--the same as a year back.
The company still has a long way to go to catch up to Verizon and AT&T. Last month, Verizon announced an $881 million third-quarter profit and a net subscriber gain of 997,000 customers. Due to help from the iPhone, AT&T posted a whopping $12.3 billion profit and added 2.6 million subscribers to its service during the third quarter.