T-Mobile loses 93,000 subscribers in Q2; 'too early' for a turnaround

T-Mobile USA reported mixed second-quarter results, and even though the company returned to stronger postpaid subscriber growth, the nation's No. 4 carrier still posted a net subscriber loss for the quarter. Rene Obermann, the CEO of parent company Deutsche Telekom, said at a press conference that it is "too early to talk about a turnaround in the U.S.," but also said that the business is showing signs of stabilizing "even if we do still have a number of challenges ahead of us."

Deutsche Telekom said its net profit in the quarter fell 8.9 percent to $625 million in the quarter, down from $686 million in the year-ago period. The company took at a hit on the merger of its British unit, T-Mobile UK, with France Telecom's Orange UK.

T-Mobile USA talked up the expansion of its HSPA+ network, which it is marketing as providing "4G speeds." The carrier plans to cover 100 major metropolitan areas--185 million people--with HSPA+ by year-end. The company reportedly also is getting ready to launch an HSPA+ Android-based smartphone from HTC in September. The device likely will be the first HSPA+ smartphone offered by the operator, and likely will be the first HSPA+ handset sold anywhere in the world.

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

Subscribers: T-Mobile reported a net subscriber loss of 93,000 customers in the quarter, wider than the net loss of 77,000 subscribers it posted in the first quarter and a far cry from its net customer additions of 325,000 in the second quarter of 2009. The company said it had fewer net prepaid subscriber additions, and said that prepaid net customer losses, including MVNO customers, were 199,000 in the quarter, compared with 41,000 net prepaid customer additions in the first quarter and 268,000 net prepaid additions in the second quarter of 2009. Still, in a bit of good news, T-Mobile posted net postpaid customer additions of 106,000 in the quarter, an improvement from 118,000 postpaid losses in the first quarter and up from 56,000 postpaid additions in the second quarter of 2009. Those numbers, while an improvement, are still far below the postpaid additions of Verizon Wireless (NYSE:VZ) and AT&T Mobility (NYSE:T) during the most recent quarter. T-Mobile ended the quarter with 33.6 million total subscribers.

Financials: T-Mobile reported net income of $404 million, up from $362 million in the first quarter and down from $425 million in the second quarter of 2009. Total revenues clocked in at $5.36 billion, up from $5.28 billion in the first quarter and $5.34 billion in the year-ago quarter. T-Mobile said service revenues were $4.70 billion, up slightly from $4.63 billion in the first quarter but down from $4.77 billion in the year-ago period.

Churn: Contract churn was 2.2 percent, flat from the first quarter and the second quarter of 2009.

ARPU: Blended average revenue per user was $47, up from $46 in the first quarter but down from $48 in the second quarter of 2009. T-Mobile said blended ARPU increased sequentially for the first time since the second quarter of 2008, driven by postpaid ARPU growth.

Data: Data service revenues came in at $1.17 billion, up 18 percent from the year-ago period. T-Mobile said 6.5 million customers were using 3G-capable smartphones at the end of the quarter, up 25 percent from the first quarter and triple the number of smartphone users from the year-ago quarter.

For more:
- see this release
- see this WSJ article (sub. req.)
- see this Bloomberg article
- check out the FierceWireless Q2 earnings page

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