T-Mobile improves in Q4, but IPO still a possibility

T-Mobile USA charged back to subscriber growth in the fourth quarter after a net subscriber loss in the previous quarter, but the carrier's future remains an open question. The operator's parent company, Deutsche Telekom, said it is still evaluating its options, including a potential initial public offering.

Deutsche Telekom posted a net loss in the quarter of $4.4 million, and was hit by an impairment charge of $673.4 million, as it took a writedown on the value of its Greek unit. Deutsche Telekom CFO Timotheus Hoettges said the carrier has not yet decided on T-Mobile USA's future. "An initial public offering for T-Mobile could be an option, but it's not necessary," he said in an interview with Dow Jones Newswires.

Earlier this month, the Wall Street Journal and several other news outlets reported that Deutsche Telekom was considering an IPO or a spinoff of T-Mobile. Hoettges said there were some signs of recovery in the fourth quarter, but he was still cautious. "We focus on a better operating performance," he said. "This would be essential for every transaction you may think of."

Here's a breakdown of some of T-Mobile's key quarterly metrics:

Subscribers: The nation's No. 4 carrier recorded 371,000 net subscriber additions in the fourth quarter, a big improvement from its 77,000 net subscriber losses in the third quarter, but down sharply from the 621,000 it had in the year-ago quarter. The company said it received a boost from T-Mobile-branded customer additions--those on contracts and prepaid wireless customers, excluding wholesale and machine-to-machine customers.

However, the carrier reported 117,000 net contract customer losses in the fourth quarter, lower than its 140,000 net contract customer losses in the third quarter, and a stark reversal from net contract customer additions of 267,000 in the fourth quarter of 2008. Prepaid net customer additions, including wholesale customers, were 488,000 in the fourth quarter of 2009, way up from 63,000 in the third quarter and 355,000 in the fourth quarter of 2008. T-Mobile ended the quarter with 33.8 million customers, and said contract customers made up 79 percent of its subscriber base.

Financials: T-Mobile's net income in the fourth quarter came in at $306 million, down from $417 million in the third quarter and $483 million in the year-ago period. T-Mobile said total revenues were $5.41 billion, up from $5.38 billion in the third quarter of 2009 but down from $5.72 billion in the fourth quarter of 2008. The company said the year-over-year drop was driven by lower service revenues. Service revenues clocked in at $4.65 billion, down from $4.73 billion in the third quarter and $4.90 billion in the fourth quarter of 2008. The drops were primarily due to a change in the carrier's customer mix, including an increase in wholesale customers.

Churn: Contract churn was up slightly to 2.5 percent, from 2.4 percent in the third quarter and the year-ago period.

ARPU: Blended average revenue per user was $46 in the fourth quarter, down from $47 in the third quarter and $50 in the fourth quarter of 2008.

Data: Data services revenue was $1.03 billion, representing 22.2 percent of blended ARPU, or $10.20 per customer, up from 21.1 percent or $10 per customer in the third quarter, and 18.5 percent/$9.30 per customer in the fourth quarter of 2008. Data services revenue increased 19 percent in 2009 compared with 2008. 

For more:
- see this FierceWireless Q4 earnings page
- see this release
- see this Dow Jones Newswires article (sub. req.)
- see this Bloomberg article

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