BELLEVUE, Wash.-T-Mobile USA Inc. said it added 1.059 million subscribers during the third quarter, which was well above the 901,000 customers the carrier added last year and surpassed most analyst predictions. The carrier also pushed past the 20 million subscriber mark, ending the quarter with 20.3 million customers on its network.
Highlighting an increasing reliance on prepaid subscribers, T-Mobile USA noted that 32 percent of its growth during the quarter came from non-contract customers. The carrier noted that its customer mix was similar to its second quarter results, but has changed dramatically from the 10 percent to 13 percent prepaid mix the carrier reported during most of 2004.
Despite the increased prepaid mix, T-Mobile USA’s customer retention improved from 3 percent during the third quarter of 2004 to 2.9 percent this year. The carrier noted that customer churn increased sequentially from the 2.8 percent posted during the second quarter of this year due to the seasonal impact of more customers reaching the end of their one-year service contracts during the third quarter.
Average revenue per user did drop $2 year-over-year from $55 during the third quarter of 2004 to $53 this year, and fell $1 sequentially from the $54 posted during the second quarter. T-Mobile USA did report that data service revenues climbed from 5.6 percent of overall ARPU during the third quarter of last year and 8.2 percent during the second quarter of this year to 8.8 percent of total APRU during the third quarter. The carrier also noted that it signed up 68,000 subscribers during the third quarter to its Research In Motion Ltd. BlackBerry offering. The carrier counted 662,000 BlackBerry customers at the end of the quarter.
Citing a reduction in handset subsidies, T-Mobile USA said its cost per gross customer addition improved from $301 during the third quarter of 2004 to $271 this year. The carrier’s cash cost per user increased slightly from $24.23 during the third quarter of 2004 to $24.65 this year, which T-Mobile USA attributed to the inclusion of costs associated with its $2.4 billion acquisition of Cingular Wireless L.L.C.’s California, Nevada and New York networks.
The strong customer growth bolstered T-Mobile USA’s revenues during the quarter, which surged more than 25 percent from $3.035 billion in 2004 to $3.802 billion this year. Net income jumped more than 80 percent year-over-year, from $254 million during the third quarter of 2004 to $458 million this year.
