T-Mobile net adds drop by more than half in Q1

T-Mobile USA had less than half the net additions in the first quarter than it had in the year-ago quarter, with the weak economy and increased competition from low-cost carriers cutting into the operator's subscriber base. Deutsche Telekom, T-Mobile's parent company, said revenue increased 20 percent when calculated in euros, but that number dropped to 4 percent in U.S. dollars due to the dollar's increase in value against the euro.

Net additions: T-Mobile USA had just 415,000 net additions in the first quarter, down from 981,000 in the year-ago quarter and 621,000 in the fourth quarter of 2008. The carrier, the nation's fourth largest, has faced increasing competition from Sprint Nextel's Boost Mobile unit and regional flat-rate carriers Leap Wireless and MetroPCS at the $50 price point. T-Mobile began offering a $50 per month unlimited calling plan in March to customers who had been with the carrier for 22 months or more, but Deutsche Telekom said it would have to continue to be aggressive in terms of pricing in the future.    

Churn: Contract churn fell to 2.3 percent, down from 2.4 percent in the fourth quarter of 2008. T-Mobile USA started a campaign in February to fight churn, and Deutsche Telekom said the plan has begun to show results.  

Network: T-Mobile reiterated its intention to nearly double the coverage of its 3G UMTS network, from 107 million POPs covered up to 205 million. 

The numbers come as Deutshce Telekom issued a profit warning for 2009 and said it expects annual earnings before interest, taxes, depreciation and amortization, adjusted for certain items, to be 2 percent to 4 percent below 2008. The company plans on freezing around $1.3 billion in capital expenditures for the year.  

For more:
- see this Telephony article [1]
- see this article on DT [2] (sub. req.)
- see this release [3]

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