T-Mobile USA Struggled with Postpaid in Q3; IPhone Effect Underscored
T-Mobile USA’s Q3 profit fell 23 percent year-over-year to $320 million. But its parent company, Deutsche Telekom, reported net income of $1.47 billion, up from $1.36 billion a year earlier.
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Unlike its German affiliate, T-Mobile USA doesn’t carry the iPhone and that meant higher customer churn, Deutsche Telekom CEO Rene Obermann said on an earnings call Thursday. T-Mobile’s contract churn was 2.4 percent in the quarter, up from 2.2 percent in Q2 and flat from the year-ago period. A partnership with Apple in the U.S. isn’t likely soon, Obermann said. It’s important to push alternative devices, he said. Meanwhile, the carrier is reviewing its options for adding spectrum, Obermann said. It launched an aggressive ad campaign this week to promote its HSPA+ wireless broadband network.
T-Mobile USA added 137,000 subscribers in the quarter after two quarters of losses. But it continued to struggle in postpaid: It lost 60,000 postpaid subscribers, an improvement from 140,000 net postpaid losses in the year-ago period, but a sharp reversal from 106,000 net postpaid additions in the previous quarter. T-Mobile now has 33.8 million customers, including 1.8 million on connected devices. The carrier said about 7.2 million customers were using smartphones on its network, more than double the 2.8 million in Q3 of 2009. T-Mobile USA’s longtime CEO, Robert Dotson, was replaced three weeks ago by Philipp Humm, who headed Deutsche Telekom’s German wireless arm 2005-2008. DT delisted its shares from the New York Stock Exchange in June, an action the company said was taken to reduce administrative costs.
The parent company’s profit could be hurt by tax regulations in Hungary this year and next, Obermann said. New rules cover banks, retailers and the telecom and energy industries. Magyar Telekom, DT’s unit in Hungary, will be affected by all three new taxes, executives said.