T-Mobile customer growth back thanks to prepaid, wholesale

The company was helped by an aggressive push of its monthly 4G plan, and saw its profits rise slightly.

T-Mobile USA saw customers flock back to its network, with growth largely propped up by its prepaid and wholesale businesses.


The carrier, a unit of Deutsche Telekom, posted a profit of $200 million, or slightly better than its year-ago profit of $135 million. Revenue, meanwhile, fell 2.5 percent to $5.03 billion.

The customer growth marks a significant improvement over the last several quarters, in which T-Mobile couldn't stop the bleeding. Last year, the company was hobbled by a looming takeover by AT&T, which ultimately failed. With the scrapped deal behind them and a $3 billion break-up fee from AT&T, T-Mobile earlier this year re-established itself as an aggressive challenger in the industry.

In total, the company added 187,000 net new customers in the period. Its results were helped by 449,000 wholesale customers and 249,000 net new prepaid customers, helped by its successful Monthly 4G no-contract offer.

The company's core business of customers who signed long-term contracts, however, made little improvement. It lost 510,000 so-called postpaid subscribers, slightly better than the 574,000 customers signed up a year ago, but a notable improvement over the 706,000 postpaid customers the dropped off in the fourth quarter. In total, T-Mobile ended the quarter with 33.4 million customers.

T-Mobile's results underscore the continued pressure that the major carriers have. Compounding its problems is the lack of the Apple iPhone, which has been a significant boon to the other carriers that offer it.

Still, its prepaid business continued to show strength at a time when other prepaid companies, such as Tracfone, MetroPCS, and Leap Wireless, all reported disappointing results during a typically strong first quarter.

The carrier is planning to use the break-up fee from AT&T to fund its network upgrade, improving its existing HSPA+ network and moving to LTE next year. It also got some spectrum and roaming agreement from AT&T as part of the breakup fee.