T-Mobile USA Starts to Stabilize
T-Mobile USA Q2 profit fell 4.9 percent to $404 million from a year earlier, the carrier reported Thursday as an executive said it’s premature to talk about a turnaround. Parent company Deutsche Telekom profit fell 8.8 percent as it deconsolidated its British unit T-Mobile U.K. with France Telecom’s British operations.
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It’s still “too early to talk about a turnaround in the U.S.,” DT CEO Rene Obermann said on a conference call. He sees growing indications of stabilization at the U.S. unit. Due to weakness in prepaid, T-Mobile USA reported a net subscriber loss of 93,000 customers in the quarter, a far cry from net customer additions of 325,000 in the year-ago period. The company added 106,000 postpaid net new customers vs. 56,000 in the year ago period. The carrier had 33.6 million customers at the end of June.
T-Mobile USA plans to cover by year’s end 100 major metropolitan areas, with a total of 185 million people, with its HSPA+ which it’s marketing as 4G, the company said. Data service rose 18 percent to $1.17 billion from the year-ago period. T-Mobile USA CEO Robert Dotson 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. Dotson will step down next May, to be replaced by Philip Humm, an executive from the parent company. Tough economic conditions persisted in parts of DT’s European markets, like Greece, Slovakia and Croatia. By contrast, the German market had a 2.4 percent year-over-year increase in earnings. On the basis of a good first six months, the company can confirm its financial guidance, Obermann said. He said the company has reached one of its key goals, making the business in Germany competitive again.