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November 9, 2006

T-Mobile reports third-quarter numbers

Posted by Tricia Duryee at 11:49 AM

Although it appeared to be a pretty blockbuster quarter for T-Mobile USA, the company's financial report today revealed less than spectacular subscriber additions.

The Bellevue-based company had several major developments during the quarter. It bought 120 airwave licenses for about $4.18 billion, allowing it to start rolling out 3G data services. It also launched the Sidekick 3 and the BlackBerry Pearl, two products that seemed to have a fanatic popularity. It launched a new advertising campaign called "Stick Together" along with a new service called myFaves, which allows subscribers to make unlimited calls to five people. It also started testing a new service in the Seattle-area that allows people to make voice calls over Wi-Fi when at home or at a T-Mobile hotspot.

Still, the company reported that it gained only 802,000 new customers in the third quarter, up slightly from the 613,000 it added in the second quarter, but down from 1.04 million in the first.

"We've made several transformational moves this year that significantly increase our strength in the marketplace," President and CEO Robert Dotson said in a press release.

The company did deliver strong third-quarter financial results: T-Mobile USA's net income was $1.79 billion, up from $233 million in the second quarter, but the increase resulted primarily from a $1.5 billion non-cash income tax benefit.

Service revenues, consisting of pre-paid and post-paid subscribers and roaming revenues, rose to $3.72 billion in the quarter, up from $3.59 billion in the previous quarter. The company attributed the increases to customer growth and the strong average revenue per user.

It also contributed heavily to its parent-company results. Deutsche Telekom reported that its cellphone unit, T-Mobile International, added 1.2 million new customers, much of those coming from the U.S.

In total, the group has 91.6 million customers, up 8.9 percent from the 84.1 million last year. In all, T-Mobile USA had 24.1 million customers at the end of the period, making it the fourth largest carrier in the U.S.

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Tricia Duryee
Tricia Duryee
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