14 DAY TRIAL // T-Mobile USA announced recently its financial results for the first quarter of the ongoing year, which was not as great as expected, at least not when compared to the same period last year. While in 2008 the mobile phone carrier announced 981,000 new subscriber additions, passing the 30 million mark, this year it only registered 415,000 net additions in the first quarter, also lower than the 621,000 seen in the fourth quarter of 2008.
The lower performance seen by the carrier comes both from the weak economical conditions, as well as from increased competition from low-cost carriers that are cutting into its subscriber base. According to Deutsche Telekom, T-Mobile's parent company, the carrier's revenue increased 20 percent when calculated in Euros, yet it goes only to 4 percent in U.S. dollars given the dollar's increase in value against the Euro.
T-Mobile is currently the fourth largest mobile phone carrier in the United States and saw increased competition from Sprint Nextel's Boost Mobile unit as well as from flat-rate carriers Leap Wireless and MetroPCS at the $50 price point. The operator started to offer its subscribers a $50 per month unlimited calling plan in March, which is available only for customers that have been with the company for more than 22 months, yet it seems that it will adopt a much more aggressive policy when it comes to pricing in the future.
T-Mobile also stated that it intended to nearly double the coverage of its 3G UMTS network to up to 205 million POPs covered, compared to the current 107 million. In addition, contract churn went down to 2.3 percent from the 2.4 percent in the previous quarter, and the carrier is known to have started a campaign in February to fight churn, and it seems that results can already be seen, according to Deutsche Telekom.
Although the financial results are not as bright as one would have expected, it seems that the carrier still has some good news, namely the fact that it managed to sell more than 1 million G1 phones in the US. Though the number might not look that impressive, as the device was launched back in October, we should also note that the company just started to roll out its 3G networks and that it is not the largest carrier in the country. Hopefully, the second Android-powered phone, which should get official in the near future, will see better traction from users.