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T-Mobile's Q1 sees revenue drop, customer gains

The No. 4 wireless carrier adds 579,000 customers in the first quarter while notching its lowest churn rate in nearly five years.

T-Mobile starts trading on NYSE as TMUS
Early in the second quarter, T-Mobile completed its merger with MetroPCS and began trading on the New York Stock Exchange. Photo by Ben Hider/NYSE Euronex

In the midst of a turnaround effort, T-Mobile reported late Tuesday that its first-quarter revenue declined 7 percent on service revenue losses while adding new customers.

The wireless carrier recorded total revenues of $4.68 billion for the first quarter, compared with $5.03 billion for the year-ago quarter. Service revenue decreased 9.9 percent to $4 billion but were offset by increased equipment revenue. Its adjusted earnings, excluding interest, tax, depreciation, and amortization, totaled $1.2 billion, a 12.4 percent increase over the fourth quarter of 2012 but a 7.5 percent decline over the year-ago period.

The wireless carrier said it finished the first quarter of 2013 with about 34 million customers, an increase of 579,000 customers from the fourth quarter of 2012. The No. 4 wireless carrier's churn rate during that time was 1.9 percent, its lowest rate in nearly five years, the company said.

"Our first quarter operating metrics and financial results are showing positive impact from the changes we began making in the fourth quarter," T-Mobile CEO John Legere said in a statement. "Branded customer net additions turned positive for the first time since the first quarter of 2009 and our postpaid business has demonstrated significant improvement."

Legere indicated that late momentum created by demand for the carrier's new no-contract service plans and the long-awaited availability of the Apple iPhone 5 on T-Mobile would carry over into the second quarter. T-Mobile said it had sold approximately 500,000 iPhone 5 units since its release on April 12.

T-Mobile officially closed its merger with MetroPCS at the beginning of the month, forming T-Mobile US, a company with around 43 million subscribers.