Feature Article

August 10, 2012

T-Mobile USA Lost over 200K Subscribers in Recent Months

T-Mobile USA reported its financial results for the second quarter and the mobile service provider seems to be losing customers, reporting a net loss of 205,000 subscribers. The operator also reported a drop in revenue. It's not all bad news for the company, though, as it did manage to pull in a profit.

Total revenue for the period was $4.4 billion, matching the $4.4 billion made in Q1, but slightly less than the $4.6 billion reported for Q2 of 2011. Overall, T-Mobile ended Q2 2012 with a net profit of $207 million — a number analysts saying was helped by a strong U.S. dollar, since T-Mobile's parent company Deutsche Telekom reports results in Euros, and a number of job cuts during the period.

T-Mobile interim CEO and president, Jim Alling, remained positive, however, in a statement: "In the second quarter T-Mobile USA started the implementation of key initiatives, such as network modernization, which will improve its competitiveness going forward."

"Looking ahead, T-Mobile USA will continue to invest in a number of key areas including the modernization of our network as we pave the way for LTE service in 2013, retail expansion, as well as an increased investment in promoting our brand," he added.

Indeed, it's possible that T-Mobile's network may have much to do with its loss of subscribers. The carrier has a decent selection of smartphones, which obviously sell very well on their own, but consumers are beginning to require better network speeds as well. As T-Mobile's LTE network begins its rollout next year, the company's quarterly results may paint a very different picture. As always, though, only time will tell.

In other news, Deutsche Telekom and T-Mobile were ordered by the U.S. Department of Labor to pay just under $350,000 to a former T-Mobile employee who had been fired in April 2009. The worker had alleged that T-Mobile was imposing fraudulent roaming charges on "hundreds of international corporate customers" and was fired for doing so. The Department of Labor ruled that the employee was protected by whistleblower protection provisions of federal law, but T-Mobile denies the allegations. The operator plans to appeal the decision.

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Edited by Rich Steeves

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