T-Mobile Gained iPhone Owners in Q4, but Lost More Postpaid Customers

 
 
By Michelle Maisto  |  Posted 2013-02-28
 
 
 

T-Mobile announced fourth-quarter 2012 results that reflect its makeover in progress.

While prepaid customer additions grew by 166,000 people, and net customer additions of 61,000 were an improvement from the same quarter a year ago, it still lost 515,000 postpaid customers during the quarter, as its 4G Long Term Evolution (LTE) strategy is still in early stages, its MetroPCS acquisition has yet to be completed, and its promised Apple products have yet to be offered.

Revenue for the quarter was $4.9 billion, which was an improvement from the third quarter but down from the fourth quarter of 2011.

CEO John Legere, the most effective embodiment of T-Mobile's new "un-carrier" branding that shareholders could possibly hope for, said in a Feb. 27 statement that the year's "strong" finish provided a foundation for "even bigger game-changing moves in 2013."

"You will see us put customers at the center of everything we do going forward, and that means giving them fair and simple wireless experiences in a way that other carriers never have before," Legere said.

Customers are already taking to the carrier's good deals.

More than 1.3 million customers during the fourth quarter chose a T-Mobile Value plan, resulting in now 30 percent of its entire contract base being a part of the program that the carrier plans to move to entirely. The Value plans do away with device subsidies, instead allowing customers to pay less for a handset up front, with an ongoing monthly payment, but also the ability to trade in the device whenever they'd like.

T-Mobile is also having luck with its bring your own device (BYOD) program; about 100,000 iPhone owners per month are bringing their unlocked smartphones to the network. Though T-Mobile doesn't yet sell an iPhone—officials reiterated that the company will "this year"—it says it now supports more than 2 million of them.

T-Mobile's LTE network—currently a footpath compared with the superhighways Verizon Wireless and AT&T have rolled out—is also ahead of schedule. The carrier now plans to cover 100 million people by mid-2013, and more than 200 million by year's end. As it begins launching LTE-enabled devices this year, its LTE rollouts in Las Vegas and Kansas City, Mo., will be complete.

T-Mobile's acquisition of prepaid carrier MetroPCS is also set to close in the "first half of 2013," T-Mobile said in its earnings statement. MetroPCS CEO Roger Linquist, announcing the financial results of MetroPCS' fourth quarter 2012 Feb. 26, said during an earnings call that he expects the deal to close "in early April."

While Linquist talked up the "new devices, faster network experience [and] advertising and branding scale" that MetroPCS' distribution partners can look forward to, Rene Obermann, CEO of T-Mobile parent company Deutsch Telekom, said he is looking forward to "creating the leading wireless value carrier with expanded scale, spectrum and financial resources to compete across the entire U.S. market."

T-Mobile has proposed interesting ideas, made big promises and has much in the works. Now, we wait and see.

"The new T-Mobile will be the value leader in the U.S., challenging the legacy, utility-like providers," said Legere, "and bringing new choices to customers, as well as unique growth opportunity for investors."

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