Straight Talk drives TracFone's 236K Q2 net adds

América Móvil's U.S. TracFone unit added close to 236,000 net subscribers in the second quarter, significantly lower than the first quarter and the year-ago period. The company blamed the slowdown in subscriber adds on higher churn.

TracFone ended the quarter with 18.75 million total subscribers, up 17.9 percent from the year-ago period and up from around 18.5 million subscribers at the end of the first quarter. However, TracFone, which sells the flat-rate, prepaid Straight Talk service and operates as an MVNO using Verizon Wireless (NYSE:VZ), AT&T Mobility (NYSE:T), and T-Mobile USA's networks, posted weaker net additions than the 780,000 it had in the first quarter and the 460,000 net adds it had in the second quarter of 2010.

In a conference call July 21 with investors, América Móvil CFO Carlos Garcia Moreno blamed seasonality for the slowdown but also acknowledged that increased churn was a factor. Churn in the quarter jumped to 4.3 percent from 4 percent in the year-ago period.

TracFone's revenue clocked in at $918 million, up 34 percent $684 million in the second quarter of 2010. Average revenue per user climbed from $12 to $15, driven by a large increase in the average minutes of use to 373 minutes per month, up from 210 in the year-ago period. Overall, the company said Straight Talk plans continue to gain acceptance in the marketplace. 

For more:
- see this América Móvil release (PDF)
- see this Seeking Alpha transcript

Related Articles:
TracFone: No plans for postpaid offering
TracFone's Straight Talk launches Nokia 6790, E71 smartphones
TracFone finishes Q1 with 18.5 million subs
T-Mobile jumps on Straight Talk bandwagon
TracFone adds 1M customers in Q1

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