T-Mobile USA announces lackluster Q3 earnings

By on Nov 4, 2010 at 7:33 AM
General November 4, 2010

Today, T-Mobile USA announced earnings from its third quarter of 2010. How did the company do? Well, to be honest, the stat sheet looks pretty beige. The company is reporting service revenues of $4.71 billion which is flat to Q2 2010 and down 0.5% year-over-year. T-Mo reports 7.2 million of its 33.8 million total customers (~ 21%) are using smartphones — only 2.8 million were using smartphones as of Q3 2009. Magenta saw wireless additions totaling 137,000 and had a lower than expected OIBDA (Operating Income Before Depreciation And Amortization) of $1.32 billion (largely due to investments in its HSPA+ network). Churn was 2.4% and 7.2% for contract and non-contract customers respectively; ARPU (average revenue per user) was $47.

“I am very pleased with the development of blended data ARPU. Along with the growing number of smartphones, this demonstrates the potential of mobile broadband data growth in the US market and for T-Mobile USA in particular,” said RenĂ© Obermann, Chief Executive Officer of Deutsche Telekom.

Hit the read link to read the full report.

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23 Comments

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  • Donny

    That’s what happens when you pretend to be a national carrier yet can only provide metro service. Poor guys.

    • Anonymous

      Seriously? It’s not a strategy for domination, but it certainly is one for profitability. T-Mobile doesn’t build out into rural areas, which may suck for customers, but it makes business sense. Why build out towers to serve a handful of customers? T-Mobile has by far the best bang for the buck in terms of capital cost to subscribers.

      Or, you could be like Sprint, which aspires to be a Verizon or AT&T, and as a result lose money quarter after quarter after quarter.

    • Anonymous

      I guess it sucks that you live in Bomgar, Idaho… move into civilization and you’ll have zero problems with it. Best service and bang for your buck, hands down. I’m typing this on my average 9 Mbps download G2 right now. I say it works pretty fine…

  • http://www.facebook.com/matt.mingkee Matt Tsui

    Even though the sub looks OK, the revenue is still there.
    If the carrier can’t make money QoQ (quarter over quarter), it’s a dangerous sign.

  • http://twitter.com/doctorRobert151 Bob Turner

    eh sprint hasnt made money in years…

  • Sin City

    Suspension of disbelief is something else. I just shake my head when t-mobile subscribers bash sprint, knowing that they are doing way worse. The crazy part is that I think T-Mobile actually tries hard to change this decline, but it’s not happening. Great customer service, cheap plans, good phone selections in each smartphone category, constant marketing, etc. A buyout might be the only thing that will stop the bleeding, unless they end up being the exclusive carrier for iphone 5G, which really is 4G marketing, but 3.5G. Likewise with Sprint, as well.

    • Anonymous

      >>knowing that they are doing way worse.

      They aren’t, you must’ve missed Sprint’s Q3 report. And the one before that, and the one before that, and the one before that, and the one before that one.

    • Anonymous

      I’m amazed at the fact-free content in your post. You think T-Mobile is doing worse than Sprint? T-Mobile has been profitable for a long time–when was the last time Sprint made a profit?

      BTW, Sprint had a “strong” 3rd quarter in that they “only” had a $900 million loss. If you think there’s going to be a buyout, it would come the other way, with T-Mobile’s parent buying out Sprint.

  • Anonymous

    The result is not bleak at all, they are able to maintain revenue during a slow quarter. Getting help from tmo is quick and reception is decent.

    Unlike the other company that got the Jesus phone, tmo is investing in the future (for its HSPA+ equipment).

  • Koncept16

    t-mobile is the worst carrier. Contract net customer losses were 60,000 in the third quarter of 2010. I bet most of them got the Evo with real 4g on Sprint!

    • Android

      There will not be “real 4G” for about 5 more years. Might want to do some reading, thanks for playing.

      • http://twitter.com/MattSTKC Matthew H.

        4G is a relative term. 4G supposedly stands for 4th Generation as a wireless standard. WiMax and LTE are both the 4th iteration of wireless communcation standards. You’re relating it to speed.

    • http://www.facebook.com/matt.mingkee Matt Tsui

      The “real 4G” will be Wimax 2 and LTE-A.

    • Anonymous

      So they helped Sprint lose less money this quarter?

  • http://twitter.com/brswa Brandon

    This is one thing that I don’t understand for some businesses. If they didn’t blow the previous quarters number out ofthe water, then it was “lackluster” or “beige” as It were. What’s wrong with having a stable business with profit on the balance sheet?

  • Mgl323

    They really need the iPhone. Android devices aren’t helping the carrier at all.

    • Anonymous

      Looks like their doing fairly well. They converted 5+ million of their subscriber base to smartphones, subscriber base is flat (probably need a focused Droid-like promotion instead of spreading it out with too many smartphones), I can’t speak about churn, and they’re still tops in customer service.

      This explains their recent plan changes because it’ll milk from the current base (contract and non) as well as take advantage of the Android base’s thirst for data and tethering.

      The fact they’re not pocketing their income, for gold pants like AT&T is, but building out more infrastructure definitely has a long-term outlook for success on it. Certainly very un-American.

  • FondestWish

    I like TMO. I get reception everywhere in my house, including the basement and the backyard.

  • http://twitter.com/MattSTKC Matthew H.

    I really hope T-Mo gets an HSPA+ iPhone 4.5, or 4S, or whatever the hell they call the next one. If Apple wants to widen their marketshare, Going T-Mo is easier than making a CDMA iPhone, and doing both will finally level the playing field against Android a bit.

  • Miro

    Tmobile USA is one of the most profitable units of Deutsche Telecom, it’s considered a cash cow because it made and makes money for the parent quite well. Their average revenue per user has been going up.

    The only problems they have are churn and adding customers – they need to keep adding good phones and broaden the selection. And they need to get some nice ads airing, something on par with the Droid and Rule The Air campaigns of Verizon

    The only way they can screw it up that I see is by doing an IPO and going public, then they’d be serving Walstreet and it’s everlasting hunger for constant growth and profits non-stop.

  • Anonymous

    I find it pretty hilarious that Sprint customers are making fun of T-Mobile making less profit this quarter. When was the last time Sprint turned a profit? You have to wonder how Sprint manages to stay in business when a “strong” quarter for them means “only” a $900 million loss.

  • Anonymous

    Well gee…it cant be because of things like…..The brand new handset from MS is launching in less than a week and theres not even a comment or picture of it up on the TMO site. OR..the brand new handset from MS is launching in less than a week and theres no display..phone or picture or information at the local TMO store. Or the brand new handset from MS is launching in less than a week and the sales person who answered the phone when I asked about Mondays launch said…” Yeah, maybe we will have some, I cant promise, maybe you better call before you come in and see if we got them”
    Great way to run a business.

  • Slickeric1

    Oh shucks…they spent millions on building out and expanding their network and lost a giant half a percent year over year while still making over a billion after operating costs. Looks like that one company that’s been losing money for years is going to have to buy them out or show them how its done.

    What’s Tmobile thinking? Making money while providing improved service for it’s customers? Never gonna be successful like that…

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