T-Mobile Reports Increase in Customers/ Loss in Profits

Filed in archive Mobile Commerce on February 26, 2010

Sometimes the wireless industry manages to pull feats that defy logic. Case in point: T-Mobile has reported a decrease in earnings, despite adding 371,000 new customers in the last quarter! To figure how in the world this is possible, T-Mobile says that it's because many of these new customers are getting involved in the lower-profit prepaid segment.

The company went on to say that it signed 488,000 prepaid customers, but lost 117,000 more-valuable contract users in the same period. Obviously this is a major concern as postpaid consumers are increasingly turning to rival providers who offer more robust data services for smartphones.

The company said its net income slid to $306 million from $483 million in the fourth quarter, with revenue dropping to $5.41 billion from $5.72 billion, due mainly to intensified price cuts in voice and text-messaging services.

T-Mobile, the fourth-largest U.S. wireless operator, owns merely 14 percent of the market, which is well behind leaders AT&T, Verizon and Sprint respectively.