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.

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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)