T-Mobile USA loses subscribers but gains smartphones

A growing number of high-end devices helped boost data revenue in the fourth quarter

T-Mobile USA suffered a net loss of 23,000 customers in the fourth quarter but gained 1 million smartphone users, which helped to increase the data revenue that the carrier pulled in from an average subscriber.

The fourth-largest mobile operator in the U.S. ended 2010 with 33.73 million customers, down from 33.76 million in the third quarter. Its additions of traditional postpaid customers fell in the quarter, primarily because of revised credit standards and "competitive intensity," T-Mobile said in a press release. T-Mobile's service revenue rose just 0.9 percent from a year earlier, and its net income dropped to $268 million from $306 million in the fourth quarter of 2009.

The bright spot for the company, the U.S. wireless operation of Deutsche Telekom, was consumer migration to smartphones that rely on data plans. At the end of the quarter, there were 8.2 million T-Mobile subscribers using smartphones, representing a net increase of 1 million from the third quarter. Meanwhile, average revenue per user (ARPU) from data services rose to $12.80 per month, up 25.5 percent from the fourth quarter of 2009. Overall ARPU for both postpaid and prepaid customers was up only slightly from a year earlier.

Even as the carrier continues to introduce new handsets and roll out a fast HSPA+ (High-Speed Packet Access) network, it faces even tougher competition from mobile giants AT&T and Verizon. Both now offer Apple iPhones, and Verizon last year launched an LTE (Long Term Evolution) network with downstream speeds between 5M bps (bits per second) and 12M bps. Sprint Nextel, the nation's third-largest carrier, offers service over Clearwire's WiMax network with advertised speeds nearly as high. Both of those fast networks reach more than 100 million U.S. residents.

T-Mobile has countered these speed gains with a network based on HSPA+ (High-Speed Packet Access), which the carrier said on Friday reaches 200 million Americans. The company has said its HSPA+ network can deliver speeds of 21M bps and will be upgraded to 42M bps this year. Though those are theoretical speeds and average users are likely to receive less throughput, the new infrastructure could make T-Mobile more competitive against the other major U.S. carriers. Last month, T-Mobile said it also plans to stem subscriber defections by improving in-home coverage offering low-cost smartphone options.

Last month, AT&T reported a record net gain of 2.8 million subscribers in the fourth quarter, including 4.1 million iPhone activations, to reach 95.5 million customers. Verizon Wireless said it added 803,000 retail subscribers during the quarter and had 102.2 million mobile customers at the end of the year, before it had even introduced its version of the iPhone.

Stephen Lawson covers mobile, storage and networking technologies for The IDG News Service. Follow Stephen on Twitter at @sdlawsonmedia. Stephen's e-mail address is stephen_lawson@idg.com

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags mobilebusiness issuestelecommunication3gfinancial resultsCarriersT-Mobile USA

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Stephen Lawson

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?