T-Mobile said Thursday that it added 325,000 net customers in its second quarter, but a contract churn rate of 2.2 percent, up from 1.9 percent a year ago is a trouble spot. T-Mobile said that its new Android-powered myTouch 3G and a distribution pact with RadioShack gives it "opportunities for new growth."
T-Mobile, the U.S. mobile unit of Deutsche Telekom, ended the quarter with 33.5 million customers, good for fourth place among carriers. However, T-Mobile is adding customers as third place Sprint is losing them.
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Among the more notable second quarter figures released by T-Mobile (statement):
The company reported net income of $425 million in the second quarter, down from $452 million a year ago. Revenue was $5.34 billion, down from $5.47 billion a year ago.
Net customer additions of 325,000 was off the pace of 415,000 in the first quarter and 668,000 in the second quarter a year ago.
Contract customers were 81 percent of T-Mobile's customer base.
Contract churn in the second quarter was 2.2 percent, down from 2.3 percent in the first quarter. In the year ago quarter, T-Mobile's contract churn was 1.9 percent. Blended churn---including prepaid and contract customers---was 3.1 percent, up from 2.7 percent a year ago. Blended churn was hit by "competitive intensity."
Average revenue per user was $48 in the second quarter, down from $55 a year ago.
What remains to be seen is whether the well-received myTouch can improve T-Mobile's metrics. Competition remains fierce and Verizon Wireless is expected to enter the Android-powered handset market in the fourth quarter with Motorola.
