T-Mobile Slide Continues as Sales Flatten, Subscribers Jump Ship

The latest quarterly earnings for T-Mobile recently emerged, and the results were not at all encouraging for those hoping to see the fourth-largest cell phone company in the United States make a run at third-largest.

Just about everything bad that could happen, did, on the most recent balance sheet, including slumping smartphone sales and record subscriber losses.

T-Mobile, a division of German firm Deutsche Telekom AG, lost a net 205,000 subscribers in the second quarter, which reportedly represented record losses for the time frame. Losses of phone subscribers under contract, meanwhile, set a separate record of its own at 557,000 subscribers lost for the quarter – a downright disaster for T-Mobile as that's where the bulk of the revenue comes from.

Revenue was the resulting problem, as year to year, numbers from contract service fees fell 9 percent. The smartphone front was no better, with other carriers seeing increases in smartphone use, but T-Mobile's use staying flat overall.

While overall revenues are down, T-Mobile is still profitable...but thanks largely to two points: a strong dollar, which helps as T-Mobile's parent Deutsche Telekom reports its results in Euros; and job cuts for T-Mobile.

Watch Sachin Shaw discuss the AT&T / T-Mobile merger in the video below.

Perhaps worst of all is the revelation that that fall is not immediately connected to the sinking economy. AT&T, Verizon and Sprint all managed to see increases in contract service fees, and T-Mobile was the only one of the major four firms to see a drop. AT&T had expressed an interest in buying T-Mobile, but the move was blocked by regulators.

T-Mobile can't cut jobs forever. If it doesn't start getting some real sales numbers, it'll develop progressively greater problems until eventually it will have little choice but to shut down. But where can T-Mobile get the numbers it needs to survive in the midst of a slumping economy?

There's still a market for cell phones, sure enough – as per recent gains for the other three firms – and it's safe to say network augmentations and a growing improvement in call quality, as well as mobile data usage, would help T-Mobile's fortunes overall.

But network upgrades cost money, and that's one thing T-Mobile's a bit short on lately.

T-Mobile's going to have to get working to improve its fortunes and get itself back on track, lest it find itself completely out of options.

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Edited by Braden Becker