T-Mobile profit and subscriber tally slide
As it awaits regulatory approval to be acquired by AT&T, T-Mobile reports some disappointing financial results for its first quarter.
T-Mobile USA suffered a difficult first quarter, the company announced today.
During the first quarter of 2011, T-Mobile saw its revenue hit $4.63 billion, putting it in line with the first quarter of 2010. However, the company's profit fell over $200 million year over year from $362 million last year to $135 million in the first quarter of 2011.
Even worse for T-Mobile, its customer tally is on the decline. The company lost 99,000 subscribers in the first quarter, bringing its total to 33.6 million. At the end of 2010, it had 33.7 million subscribers. Over the last five trailing quarters, T-Mobile has seen subscriber numbers increase just once. That gain occurred in the third quarter when it added 137,000 subscribers to its service. However, during the entirety of 2010, it lost a total of 56,000 customers.
But it wasn't all bad news. The company said today that the number of subscribers who are now using its 3G or 4G phones has increased by nearly 1 million year over year to 9.1 million customers. Moreover, its 4G network now covers more than 200 million people around the U.S., and is available in 170 markets. It's currently upgrading download speeds to 42Mbps, which should be available to over 140 million people by the middle of the year.
Regardless of all the good and bad that went on last quarter, most of the focus on the company revolves around AT&T. Earlier this year, AT&T announced that it intended to acquire T-Mobile USA for $39 billion in cash and stock. If the deal is approved by regulatory bodies, current T-Mobile USA owner Deutsche Telekom would receive an 8 percent equity stake in AT&T. It would also get one seat on the carrier's board of directors.
But until that can happen, the companies need to get through the long and arduous approval process. T-Mobile currently estimates the deal won't close until the first half of 2012. If the deal is approved, AT&T and T-Mobile would become the dominant force in the wireless market with over 130 million subscribers. Verizon Wireless, the would-be second-place carrier, currently has 104 million wireless "connections," including 88.4 million retail customers.