T-Mobile

T-Mobile has just posted its Q4 2012 operating results, with $4.9 billion in revenue, net customer additions of 61,000 and contract customer churn of 2.5-percent. Overall, it seems to have been a positive quarter for the carrier. Here are a few of the highlights:

  • $4.9 billion in revenue for the quarter, down 5.2-percent year-over-year
  • 61,000 net customer additions for the quarter, up from 512,000 lost in Q4 2011
  • Net income of just $24 million, mostly due to high marketing and capital expenditures
  • Branded contract churn of 2.5-percent, down 50 basis points y-o-y
  • Branded prepaid revenue of $474 million, up 35-percent y-o-y

The results were again a bit of a mixed bag for T-Mobile as the nation's 4th place carrier pushes with its strategy to stop contract subsidies and launch an LTE network. Branded contract ARPU (Average Revenue Per User) fell 4.7-percent y-o-y to $55.47, mostly due to high adoption of Value Plans which have lower service revenues. T-Mobile claims a full 30-percent of its customers are now on subsidy-free Value Plans, up 1.6 million in the quarter.

Increases in handset revenue (Value Plan customers often purchase phones at full price) were up, however, which offset losses in contract revenue. T-Mobile points out that 79-percent of phone sales in the quarter were smart phones, accounting for 95-percent of phone sales revenues. It specifically calls out the Galaxy SIII (S3) as driving smart phone sales.

T-Mobile is continuing a slow but steady march towards prepaid with strong gains in Q4. Branded prepaid ARPU rose 11.2-percent to $27.69, and while prepaid churn was at a relatively high 7-percent, net branded prepaid customer additions were at 166,000. T-Mobile ended the quarter with 5.82 million branded prepaid customers -- up 21-percent y-o-y -- along with 4.18 million prepaid MVNO customers, up by 275,000 this quarter. Overall, branded prepaid revenues were $474 million for the quarter, which is up a substantial 35-percent over Q4 2011.

Burdened by high capital expenditures on its network infrastructure related to 1900MHz deployment, as well as increased marketing pushes, the quarter ended on a moderate note. For the coming months, T-Mobile is focusing on its expected merger with MetroPCS and launch of LTE to hopefully improve its bottom line.

Source: T-Mobile; Full Financial Release (PDF)