August 8, 2013
For Big Pink, Business Is Booming – Adds 1.1 Million Subscribers In Second Quarter
Michael Harper for redOrbit.com - Your Universe Online
T-Mobile just announced their strongest customer growth numbers in four years. In the second quarter, T-Mobile added a net total of 1.1 million subscribers to their service. In April, customers were finally able to buy a T-Mobile version of the iPhone, a partnership T-Mobile had long been working to bring to life.To sweeten the pot, the telecommunications company has also been offering no-contract plans and aggressive subsidies while continuing to roll out their new expanded 4G LTE network. Calling themselves the "Un-carrier," T-Mobile also began offering the "Jump!" program which gives customers the chance to upgrade more frequently. The iPhone was also a big seller for T-Mobile in the second quarter, accounting for 29 percent of the carrier's gross added subscriptions and smartphone upgrade sales.
"T-Mobile's Un-carrier approach has clearly resonated with consumers," explained T-Mobile President and Chief Executive John Legere in a statement following the release of their second quarter results.
"By fixing the things that drive them mad, like contracts and upgrades, and freeing them from the two-year sentences imposed on them by our competitors, they are choosing the new T-Mobile in unprecedented numbers. We are just beginning and we will continue to apply this innovative thinking to the Un-carrier offers we create and to the internal operations of our company, which taken together are driving significant shareholder value creation."
T-Mobile and Metro PCS also completed their merger in May and are now a US public company called T-Mobile US Inc. Previously T-Mobile acted as an extension of Deutsche Telekom AG in Germany, and Deutsche Telekom still owns 74 percent of T-Mobile US Inc.
While net subscribers were up thanks to aggressively priced plans and the availability of Apple's iPhone, the company still reported a net loss of $16 million from the previous quarter, while the company reported a total $107 million profit last year. Though operating at a loss, the acquisition of Metro PCS helped to increase revenue from the previous quarter's $4.68 billion to $6.23 billion, reported the Wall Street Journal.
Customer churn, or the rate at which subscribers leave the service, fell to 1.6 percent for postpaid customers. Last year their churn rate was 2.1 percent, another sign of improvement from the Un-carrier. Though they're holding on to more of their customers, their new low-priced plans have reduced the average revenue per user (ARPU) in the second quarter. Currently, the ARPU is $53.6 for postpaid customers, representing a 6.5 percent decrease year over year. Once again, the Metro PCS merger has helped T-Mobile's business, increasing their prepaid ARPU by 29.7 percent to $34.78, PCWorld reported.
The company also said they're now "ahead" of schedule to roll out their new 4G LTE network. In March, T-Mobile announced they plan to have 200 million users covered by the new network by the end of the year. Yesterday they announced they already have 157 million customers covered in 116 metropolitan cities all over America, well on their way towards the 200-million mark.