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

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."

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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

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54 comments
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  • Guess AT&T is the golden-goose killer after all

    Seems like T-Mobile customers are *really* unhappy about AT&T buying T-mobile...
    wolf_z
    • Indeed

      @wolf_z I was thinking much the same thing when I read this.
      athynz
    • I am sure that isn't it.

      @wolf_z Give it a rest. Verizon honestly is no better then AT&T (LTE aside). Everything one does, the other follows.
      Bates_
      • Message has been deleted.

        xSteven777x
      • Message has been deleted.

        ScorpioBlue
      • RE: T-Mobile loses 471,000 contract customers, cites 'competitive pressures'

        @Bates_

        Apparently, you haven't been paying attention. T-mob announced halfway through the quarter that they were trying to sell to AT&T. T-mob customers don't sign with T-mob because they want to be T-mob customers. They don't want to be AT&T or Verizon customers. Announcing that you're going to sell to either one means that over the course of the year it takes to close the sale you're going to lose half your customers.
        tkejlboom
      • RE: T-Mobile loses 471,000 contract customers, cites 'competitive pressures'

        @Bates_
        YES... interesting how they follow one another... In some circles, this is known as "collusion"... of course, to keep 'em attorneys off my ass, I'll state that this is just my opinion.
        Ray Burne
      • RE: T-Mobile loses 471,000 contract customers, cites 'competitive pressures'

        @xSteven777x I used to think that, then I've been having problems with T-Mobile for the last year and a half. SIM card swaps, device swaps, all that crap - same problems. Paired with the fact that they're falling behind on technology by a long shot (no LTE or WiMAX plans), I'm glad to be rid of them.
        Champ_Kind
      • Pot meet Kettle

        @xStephen777x Dude use YOUR brain and shut the hell up. This:[b]
        Att=trash
        Verizon=acceptable trash
        Tmobile=the only decent cell phone provider in america[/b]

        is purely subjective based on one's location. In my area AT&T is the best followed by VZW, Sprint, and then T-Mobile which blows. Unlike you however I do realize that while T-Mobile's service sucks out loud here it's great somewhere else.
        athynz
    • RE: T-Mobile loses 471,000 contract customers, cites 'competitive pressures'

      @wolf_z...Perhaps they aren't happy about it, but the announcement by ATT for the acquisition of T-Mobile did not happen until March 20th, 2011; I highly doubt that T-Mobile lost customers, en masse, between March 20th and March 31st. T-Mobile, however, really does need to diversify their phone line up; they keep trying to change and restructure their plans, but that alone simply is not compelling enough to keep their existing customers or to attract customers away from other carriers.
      1019902735
      • I love Topics like this!

        @1019902735
        Exactly. People need to stop blaming AT&T for every little thing wrong in the mobile network world. "T-Mobile lost customers, that HAS to be AT&T's fault. Nothing else makes sense because we don't want to bother doing research so let's just blame AT&T."

        @ScorpioBlue
        Thanks for the support there.

        @xSteven777x
        I use it quite often thank you. T-Mobile should be bottom rung in my opinion (for my area). The coverage for whatever reason is just horrible. So instead of turning into a fanboy troll, just relax and try to accept someone else's opinion. It's hard but I am sure you have the mental capacity to at least try.
        Bates_
      • RE: T-Mobile loses 471,000 contract customers, cites 'competitive pressures

        @1019902735 Actually, this is exactly what has happened to me. I have had t-mobile for years and I have been happy but there is no way I am going to sign another contract until I see how this shakes out. My contract ends in December. They give me a partial upgrade between contracts and I usually take it and extend the contract because I like having the latest phone but not this time.

        I had AT&T pre-cingular and even though it is not the same company now, I would never have that logo on my phone after they shut my phone off over a $25 disputed charge (I had paid the $150+ bill) on the day my father died and then wouldn't turn it on even when I offered to pay. No thanks. Never ever again.
        redhaven
      • RE: T-Mobile loses 471,000 contract customers, cites 'competitive pressures'

        @1019902735

        Uh, 471,000 was a little less than 2% of their 26,375,000 contracts and 10 days is a little less than 3% of a year. Actually, as the typical contract term is 2 years now, the numbers line up REALLY close.

        I agree Q2 will be much more interesting, but especially small businesses making end of quarter decisions seem far less likely to re-sign. That would in turn explain why their total loss of customers is a fraction of the fraction of the loss of contracts.
        tkejlboom
    • Message has been deleted.

      paul613
    • Message has been deleted.

      paul613
    • I believe you are correct

      @wolf_z
      As a very happy T-Mobile customer, I can say that I am NOT happy about the pending AT&T takeover. I just re-upped my contract, though - right before the takeover was announced. So I'll stick around and see what happens for now.
      doodlius
      • RE: T-Mobile loses 471,000 contract customers, cites 'competitive pressures'

        @doodlius
        Never another contract... for me. The real issue is that even with a no-contract or out-of-contract the dangers are in the restrictions in the Terms of Use... for example, if you buy a iPhone for retail FULL price (goes for ANY smartphone), AT&T WILL force you into a minimum of $15/month even if you DO NOT want data... so, you can't use that smartphone for a PDA and WiFi-only access. Check it out - it is true. Then, AT&T will change those Terms and Conditions of Use whenever they want to... you really have no recourse... contract or not.
        Where the hell is the Commerce Department and Dept. of Justice? Maybe they are being paid off - of course, all of this is just my opinion.
        Ray Burne
      • RE: T-Mobile loses 471,000 contract customers, cites 'competitive pressures'

        @Ray Burne - Dude put your tin foil hat back on, it's slipping. It is well known that any smartphone device requires a data plan, contract or not - it's EVERY carrier. If you got a giant data bill in the mail, you'd be glad you had it.

        Contract do two things: lowers the cost of the phone, preserves your rate plan and terms for the period of time. Non-contract is subject to change every month. If you are on a contract and the Terms and Conditions change, you DO have every right to not accept it and terminate (without an early termination fee) under the Material Adverse Affect clause. Try reading your contract.
        JT82
      • Sounds like someone's never been a T-Mo customer

        @JT82:

        "@Ray Burne - Dude put your tin foil hat back on, it's slipping. It is well known that any smartphone device requires a data plan, contract or not - it's EVERY carrier. If you got a giant data bill in the mail, you'd be glad you had it."

        I dunno how things work on Verizon or AT&T for you, but here in T-Mobile's customer-centric world...

        --Any smartphone device requires a data plan FOR SUBSIDY. You can pay full price for a handset, not renew your contract, and not be forced to get a data plan. Hit up your local T-Mo store and ask them. I've done it myself, personally. Twice.

        --If you don't sign up for a data plan, T-Mo simply blocks access to their data network. You don't get data access, but you don't get the bill for one, either.

        --On paper, you might be accurate regarding the fact that the contract guarantees that your rate won't change. In practice, we signed up for unlimited texting on three lines for $19.99 four years ago. I still pay $19.99, despite that plan now costing $29.99.


        As an added bonus, we don't pay for data overages, either. After the 5GB/2GB soft-limite, we just get throttled back down to EDGE. Slow? yes. But e-mail still flows, twitter still tweets, and my bill doesn't change.

        Did I mention that the STOCK firmware for my phone includes a tethering application, and my ability to use it for tethering is covered under my service agreement for as long as I own the phone that does it?


        If AT&T were to take up those terms, I wouldn't care that the name on the bill changed. Their track record, though, leads me to believe that I'll instead be laughed out of the board room for the suggestion.

        Joey
        voyager529
    • RE: T-Mobile loses 471,000 contract customers, cites 'competitive pressures'

      @wolf_z I left AT&T (and I'm a retiree with a small $19 discount) because they were asses about smartphones... Now, I'm going to leave T-Mobile if the deal goes through. I'm so annoyed with this crap that I have been experimenting with WiFi ONLY on my old iPhone and I think I can get away with VOICE ONLY in the new world order. Screw 'em all.<br>(Everything here is my opinion, facts remain for you to decide on your own issue.)
      Ray Burne