T-Mobile USA Sees Steep Customer Losses in First Quarter
T-Mobile USA reported it lost nearly 100,000 customers compared to the prior quarter as the company continued to struggle to sign new contract customers. However, its revenue was roughly flat from a year ago, as the company increased the amount of revenue it got per customer.
For the quarter, T-Mobile said its service revenue was $4.63 billion, about the same as a year earlier, though operating income before depreciation and amortization fell $200 million. In particular, the company struggled to sign new contract customers as its mix continued to shift to prepaid customers.
“The first quarter shows a mixed picture,” Rene Obermann, CEO of T-Mobile parent company Deutsche Telekom, said in a statement.
Of course, most eyes these days are on T-Mobile USA’s planned sale to AT&T for $39 billion–a deal that still requires regulatory approval from both the Federal Communications Comission and the Department of Justice. A Senate subcommittee is scheduled to hold hearings of its own next week.
“Our deal with AT&T announced a few weeks ago will not change the focus of our US business. Until the closing of the deal, T-Mobile will continue to challenge its competitors and compete aggressively in the US market.”
T-Mobile, which had been attacking AT&T, in particular, in its ads, now focuses its TV campaign generically on its rivals as seeking to hit customers with all sorts of overage and other charges. The company ended the first quarter with 33.6 million customers, down from 33.7 million in both the December quarter and a year ago. However, it lost 471,000 contract customers sequentially, offset some by the fact it gained 372,000 prepaid customers.