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T-Mobile Reaches 25 Million Customers

Fri, 03/23/2007 - 1:05pm
Eric M. Zeman

T-Mobile, the U.S. wireless arm of Deutsche Telekom (DT), added 901,000 new customers in the fourth quarter, pushing it above the 25-million-customer mark for the first time. Of the 901,000 additions, 87% were postpay customers, up from 66% in the year-ago quarter. The fourth-quarter results follow T-Mobile’s 802,000 third-quarter increase. Of its 25 million customers, 85% are postpay. T-Mobile also decreased churn, from 2.3% in the third quarter to 2.1% in the fourth.

Revenue was up across most segments of T-Mobile’s business, with service revenues rising from $3.72 billion to $3.81 billion. Revenue from data services also grew, reaching $475 million in the quarter. According to the company, a lot of this growth came from T-Mobile’s addition of data devices such as the BlackBerry Pearl and T-Mobile Sidekick 3. Net income for the company was $179 million in the fourth quarter, down from $1.79 billion in the third. The large difference is due mostly in part to the recognition of non-cash income tax benefits in the third quarter. Overall average revenue per unit (ARPU) remained steady at $52 when compared to previous quarters.

T-Mobile attributed much of its growth to its myFaves program and new 2-year agreements. "myFaves is attracting a new class of customers to our company," said Robert Dotson, CEO and president of T-Mobile USA.

Meanwhile, parent company DT announced a quarterly loss of $1.2 billion. Even though overall sales improved 2.4% to $21 billion, 1-time charges and the loss of traditional wireline customers contributed to the loss.

DT lauded its U.S. wireless business as one sector of the company continuing to provide growth. "T-Mobile USA is playing an increasingly vital role in bringing a service leadership culture to all of DT," said Rene Obermann, CEO of DT. "At more than 25 million customers and growing, the U.S. business continues to assert its position as the leading growth driver for Deutsche Telekom."

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