T-Mobile USA Customer Growth Slows

In the second quarter of 2006 T-Mobile USA says that it added 613,000 net new customers, down from 972,000 in the second quarter of 2005, and the 1.04 million net customers added in the first quarter of 2006. Postpay customers made up 83% of the second quarter customer growth, up from 70% in the first quarter of 2006, and comprised 84% of T-Mobile USA's total customer base at June 30, 2006.

"In the second quarter, we followed through on a long-term planned shift in our business aimed at investing in longer relationships with customers," said Robert Dotson, President and Chief Executive Officer, T-Mobile USA. "One of the major changes executed was a move to 2-year service agreements. While this change resulted in lower net add growth in April during the transition, by June, we finished with one of our best months of top-line sales since the holidays. Today, we are now well positioned in our drive to reduce customer churn to even lower levels while ensuring our customers continue to Get More from their T-Mobile service. Also encouraging during the quarter was the continued strong growth in our sales of converged devices. We have now surpassed the milestone of 800,000 BlackBerry users, with an increase of 51,000 in the second quarter of 2006, equivalent to 10% of the net growth in postpay customers during the quarter."

Rene Obermann, CEO of T-Mobile International and member of the Board of Management of Deutsche Telekom remarked: "T-Mobile USA has delivered quality growth for the business quarter after quarter, year after year. We remain very optimistic about the future growth opportunities for T-Mobile in the U.S. market. We are also encouraged by the U.S. team's continued success in delivering consistently strong financial metrics."

T-Mobile USA reported OIBDA of US$1.21 billion in the second quarter of 2006, up from US$1.10 billion in the first quarter of 2006 and up from US$1.08 billion in the second quarter of 2005. T-Mobile USA's net income for the second quarter of 2006 was $233 million, down from $241 million in the first quarter of 2006 and $387 million in the second quarter of 2005. The decrease in net income, despite higher operating income, is primarily due to higher income tax expense.

T-Mobile also noted that data services revenue from postpay and prepaid customers continued to grow, reaching a total of US$390 million in the second quarter of 2006. Data revenues, which are a component of service revenues, represented 10.9% of blended ARPU, or $5.65 per customer."

Posted to the site on 11th August 2006