May 10, 2012 | by Andrew Kameka
T-Mobile had a bit of good news, really bad news, and then some kind of good news in the first quarter of 2012. In its Q1 2012 earnings report, the nation’s fourth-ranked carrier revealed that it gained 187,000 net customers. That’s a big improvement on the 99,000 net losses during the same period last year.
Unfortunately, T-Mobile’s growth came largely in the pre-paid market, which is less valuable. The company lost 510,000 contract customers, an improvement over the 706,000 lost in Q1 2011, and the 574,000 lost in Q4 2011. Fewer losses is a good thing, but it’s still a loss, something T-Mobile is struggling to reverse.
The silver lining is that T-Mobile is still hurting but showed signs of taking baby steps towards improving performance.
“In the first quarter, T-Mobile USA delivered strong performance across several key metrics – adding customers, increasing branded ARPUs year-on-year and effectively managing costs to deliver a solid adjusted OIBDA margin. While branded contract churn remains a focus, in the first quarter of 2012 we achieved our lowest level in seven quarters…In just a short time since the December breakup of the AT&T deal, T-Mobile USA has redefined and restarted our Challenger Strategy including phase one of a major brand re-launch to redefine T-Mobile in the marketplace.”
- Philipp Humm, CEO and President of T-Mobile USA.
The Challenger Strategy is an advertising campaign touting T-Mobile’s network speeds and value. The ads are more aggressive and go after the AT&T iPhone, the device often blamed for T-Mobile’s problems. While Team Magenta has struggled for a while, it’s believed that being the only major carrier without the iPhone gives customers too much incentive to leave.
Could advertising, new devices, or a rumored merger with MetroPCS changes things for the better? Let’s hope.
|Quarter to Date|
|March 31,||December 31,||March 31,||Y-o-Y|
|Customers, end of period2|
|Branded Contract Customers||21,857||22,367||23,999||(9||%)|
|Branded Prepaid Customers||5,068||4,819||4,416||15||%|
|Total Branded Customers||26,925||27,186||28,415||(5||%)|
|Total Wholesale Customers||6,448||5,999||5,220||24||%|
|Total T-Mobile USA Customers||33,373||33,185||33,635||(1||%)|
|Thereof, Contract Customers||24,548||24,797||26,065||(6||%)|
|Thereof, Prepaid Customers||8,824||8,389||7,570||17||%|