T-Mobile USA Loses Customers as Parent Company Returns to Profit in Q1
T-Mobile USA reported a net subscriber loss of 77,000 in Q1, a sharp reversal of an increase of 415,000 a year earlier. But parent Deutsche Telekom rebounded to a net profit of $972.8 million from a $1.4 billion net loss from a year earlier, when its earnings were weighed down by goodwill charges on its U.K. business.
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T-Mobile USA did post net income of $362 million, up slightly from $322 million a year earlier. The U.S. performance is “not satisfying,” CEO Rene Obermann said on a conference call Wednesday. But the U.S. unit is still “a cash cow,” he said, adding, “We are earning good money in the U.S. … We will put every effort into growing data revenues and mobile Internet.” He hopes for a tailwind from an economic recovery. Obermann declined to comment on reports that Deutsche Telekom is in talks with Harbinger Capital about a possible alliance to give T-Mobile USA access to the hedge fund’s planned 4G network. But Obermann acknowledged that the company needs to remain open to cooperation on 4G, “for instance with other network operators, where one could share the network in certain regions,” because capital spending “would be huge if you plan to cover a large area."
T-Mobile USA’s capital spending in the quarter fell to $666 million from $1.13 billion a year earlier. The company had 5.2 million smartphone customers on its network, up 33 percent from Q4. The carrier said it’s aiming for 8 million smartphone users by year-end. By then, T-Mobile expects to have HSPA+ deployed across the vast majority of its 3G footprint, covering more than 100 metropolitan areas and 185 million people.
DT’s Q1 revenue in southern and eastern Europe increased 22 percent year-over-year. Revenue from mobile-data traffic in Germany grew 38 percent and in the U.S. 18 percent. The parent company is cutting costs to reduce spending $5.33 billion before 2013.