T-Mobile just couldn't compete with the barrage of iPhone 4S devices coming from rivals AT&T, Sprint and Verizon.
The company said that it ended the fourth quarter with 33.2 million customers, down from 33.7 million at the end of the third quarter.
In addition, T-Mobile saw net customer losses of 526,000 in the fourth quarter. In the third quarter, T-Mobile added 126,000 net customers.
The problem? T-Mobile doesn't have the iPhone 4S. The company said in a statement:
The sequential and year-on-year increase in customer losses is a result of intense competitive pressure from the launch of the iPhone 4S by three nationwide competitors in the fourth quarter of 2011. In addition, higher connected device deactivations contributed significantly to the net customer loss in the fourth quarter of 2011, including a nearly 265,000 deactivation related to one customer with a yearly service revenue impact of less than $1 million.
What's unclear is T-Mobile's path forward. CEO Philipp Humm said that the company will invest to grow the business and bolster its network. Humm also noted that "not carrying the iPhone led to a significant increase in contract deactivations in the fourth quarter of 2011." T-Mobile is also planning a "challenger strategy" as well as an LTE rollout in 2013. However, those moves are really table stakes.
T-Mobile was planning to merge with AT&T, but regulators shot down the deal. Now T-Mobile is twisting in the wind a bit. The figures are a bit ugly:
Contract net customer losses were 802,000 in the fourth quarter.
Churn spiked to 4 percent in the fourth quarter, up from 3.2 percent in the third quarter.
Contract churn was 3.1 percent, up from 2.4 percent in the third quarter.
On the bright side, T-Mobile is adding prepaid customers, but those users aren't the most profitable for the carrier.
T-Mobile reported fourth quarter OIBDA (Operating Income Before Interest, Depreciation, Amortization and Impairment) of $1.27 billion on revenue of $5.18 billion, down from $5.36 billion a year ago. The company didn't report a net income figure.