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Mar. 1, 2009

On average, fourth-quarter sales from T-Mobile USA showed that the industry’s No. 3 and No. 4 players were no match for their larger rivals during the all-important holiday shopping season.

T-Mobile USA previously announced that it had 621,000 net new customer additions during the final three months of last year, which was about 50,000 less than it added during the third quarter and 300,000 less than it added during 2007’s corresponding period.

Overall, contract customers made up about 42.9 percent of the new subscriber additions during the fourth quarter of 2009, notably down from the 77.2 percent during the fourth quarter of 2007.

The wireless carrier said that contract customers accounted for about 81.8 percent of its 32.81 million customers at the end of last year.

For its part, Sprint Nextel said it lost more than 1 million customers during the fourth quarter of 2008, while the industry’s No. 1 and No. 2 operators — Verizon Wireless and AT&T Mobility — posted 1.4 million and 2.1 million net new users, respectively.

However, T-Mobile USA blamed its shortfall on an increase in postpaid churn from 1.8 percent in 2007 to 2.4 percent last year. So called 'blended churn' also increased from 2.8 percent during the fourth quarter of 2007 to 3.3 percent in 2008.

Though T-Mobile USA’s data ARPU (average revenue per user) fell short of its larger rivals AT&T Mobility, Verizon Wireless and Sprint Nextel, which all reached $13 or higher during Q4 2008, the wireless carrier is strongly intent on getting its customers up to speed.

T-Mobile USA said it extended its 3G network to cover 107 million people in 130 cities at the end of 2008. T-Mobile USA also continued investments in its GSM/GRPS/EDGE network, saying it added 1,100 new cells sites to the network during 2008’s fourth quarter.

Despite the current slowdown in growth, T-Mobile USA posted a notable increase in revenues from $5.1 billion during the fourth quarter of 2007 to $5.7 billion, while net income surged from $383 million to $483 million.

Total average revenue per user dropped by $2 year-over-year and sequentially to $50 — however, data ARPU increased more than 17 percent sequentially to $9.30 during the fourth quarter of last year.

The mobile carrier is also reportedly looking to shore up its position in the increasingly competitive low-cost space by trialing an unlimited calling plan at $50 per month.

The price point has gained increased attention following Sprint Nextel’s Boost Mobile introduction of a no-contract, unlimited plan for $50 per month, and the successful quarter reported by unlimited calling providers Leap Wireless International and MetroPCS Communications.

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Source: T-Mobile USA.