T-Mobile loses 471,000 contract customers, cites 'competitive pressures'

Summary:According to T-Mobile, "the decline in net contract customers was driven primarily by fewer contract gross customer additions and continued high contract churn due to competitive pressures."

T-Mobile USA saw a spike in contract customer losses as it struggles to compete with other carriers.

The company said Friday that it lost 471,000 net contract customers in the first quarter compared to 318,000 in the fourth quarter and 77,000 a year ago. Overall, T-Mobile lost 99,000 customers in the quarter.

According to T-Mobile, "the decline in net contract customers was driven primarily by fewer contract gross customer additions and continued high contract churn due to competitive pressures."

Total churn was 3.4 percent in the first quarter and contract churn was 2.4 percent, up from 2.2 percent a year ago.

There has been anecdotal evidence that T-Mobile has been working to keep customers in the fold with random check-in calls. Meanwhile, AT&T, Verizon and Sprint continue to outperform T-Mobile, which is outgunned on devices and networks.

To wit:

The unknown is whether T-Mobile can hold customers until AT&T acquires the company.

T-Mobile ended the first quarter with 33.63 million customers, down from 33.73 million in the fourth quarter and 33.71 million in the first quarter a year ago.

The company reported first quarter earnings of $135 million, down from $362 million a year ago. Revenue was $5.16 billion, down from $5.28 billion a year ago.

T-Mobile USA CEO Philipp Humm said that the company is laying the groundwork for better results, but still "has challenges facing our business." Rene Obermann, CEO of T-Mobile parent Deutsche Telekom, said T-Mobile will compete aggressively until the AT&T deal closes.

Topics: Enterprise Software, Banking, Mobility

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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