T-Mobile USA revenue jumps despite weak subscriber growth
T-Mobile USA reported a boost in net income and revenue despite a significant drop in subscriber additions. The carrier, a unit of Deutsche Telekom, reported net income for the fourth quarter of 2008 of $483 million, up from $383 million in the year-ago quarter and up from $442 million in the third quarter of 2008.
Revenue: The carrier, the nation's fourth largest, has service revenues of $4.90 billion in the quarter, up from $4.37 billion in the fourth quarter of 2007. Total revenues were $5.72 billion in the fourth quarter of 2008, up from $5.51 billion in the third quarter of 2008 and $5.07 billion in the year-ago period. T-Mobile said that higher total revenues were driven in part by a jump in demand for new devices like the T-Mobile G1 as well as higher contract revenues stemming from T-Mobile's February 2008 acquisition of SunCom Wireless.
Net adds: T-Mobile reported 621,000 net new subscriber additions in the quarter, down from 670,000 in the third quarter of 2008 and 951,000 in the fourth quarter of 2007. The number was the lowest quarterly net subscriber additions since the second quarter of 2006. T-Mobile ended the year with 32.8 million subscribers. The carrier added 4.07 million net new customers in 2008, compared to 3.64 million added in all of 2007. This past year's total included 2.94 million organic net new customers and 1.13 million that were acquired as part the SunCom acquisition.
Churn: Contract, or postpaid, churn for the fourth quarter was 2.4 percent, the same as the third quarter of 2008 and up from 1.8 percent in the fourth quarter of 2007. Blended churn, including both postpaid and prepaid subscribers, was 3.3 percent in the quarter and up from 3 percent in the third quarter of 2008 and 2.8 percent in the year-ago period. The carrier said its contract churn continues to be affected by the end of two-year contracts, which were first introduced in April 2006, and increased competition.
ARPU: Contract ARPU at the carrier was $54 in the quarter, down from $55 in the third quarter of 2008 and $56 in the fourth quarter of 2007. Blended ARPU was $50 in the fourth quarter of 2008, down from $52 in both the the third quarter of 2008 and the year-ago period.
Data revenue: Data services revenue was $905 million in the quarter, representing 18.5 percent of blended ARPU, up from 15.8 percent of blended ARPU in the fourth quarter of 2007. Data services revenue jumped 31 percent in the fourth quarter of 2008 as compared to the year-ago quarter.
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