T-Mobile reported their first quarter results and we will just get the bad right out of the way. T-Mobile lost 77,000 customers in the first quarter of 2010 compared to a net addition of 415,000 customers in the same quarter of last year. That’s the bad, the good news is they are still making money. With 5.2 million customers using 3G-capable devices and data ARPU up 16% from last quarter, T-Mobile is still poised to make a surge in their 3G offerings with HSPA+ right around the corner. With 185 million people expected to be covered by HSPA+ by the end of 2010 and the first handsets coming in the next 30 days or so, T-Mobile we sure hope you get your marketing game rocking and rolling, like now.

Press Release:

BELLEVUE, Wash., May 12, 2010 — T-Mobile USA, Inc. (“T-Mobile USA”) today reported first quarter of 2010 results.  In the first quarter of 2010, T-Mobile USA reported OIBDA of $1.39 billion, compared to $1.38 billion reported in first quarter of 2009. Total customers served declined by 77,000 in the first quarter of 2010 compared to 415,000 net customer additions in the first quarter of 2009.  Additionally, customers using 3G-capable converged devices continued to increase significantly during the quarter.

“As T-Mobile USA continues to drive data as a revenue growth engine, we experienced meaningful traction in the first quarter of 2010 by getting a host of next-generation smartphones into the hands of our customers.  Products like our popular myTouch 3G and HTC HD2, coupled with our industry-leading data value message, continued our strong year-over-year data revenue growth,” said Robert Dotson, President and CEO, T-Mobile, USA.  “We also continue to make real improvements to reduce churn of our most valuable customers, and we are making major leaps in expanding our HSPA+ footprint – the fastest and soon-to-be the most widely available higher-speed network in the country.”

René Obermann, Chief Executive Officer, Deutsche Telekom, said, “T-Mobile USA achieved a slightly higher margin and strong data ARPU, despite a challenging and highly competitive business environment.  In addition, the strong growth in customers with 3G smartphones, plus expanding the HSPA+ network and pipeline of innovative offerings, positions T-Mobile USA to capture the data opportunity in the United States.”

Customers

• T-Mobile USA served 33.7 million customers at the end of the first quarter of 2010, down from 33.8 million at the end of the fourth quarter of 2009 and up from 33.2 million at the end of the first quarter of 2009.
  • In the first quarter of 2010, total customers served declined by 77,000, compared to net customer additions of 371,000 in the fourth quarter of 2009 and 415,000 in the first quarter of 2009.
  • Compared to the fourth quarter of 2009, the number of net new customer additions decreased due primarily to T-Mobile branded customer losses (total wireless customers excluding mobile virtual network operators (MVNO) and connected devices).  In the fourth quarter of 2009, branded customer additions benefited from strong holiday sales and the launch of the new Even More and Even More Plus rate plans which feature unlimited voice, text and data services.
• Net contract customer losses were 118,000 in the first quarter of 2010, broadly stable compared to 117,000 net contract customer losses in the fourth quarter of 2009, but down from 160,000 net contract customer additions in the first quarter of 2009.
  • Sequentially, seasonally lower gross additions of branded products were offset by connected device growth.
  • The decrease in contract customer additions compared to the first quarter of 2009 was due primarily to fewer FlexPay^sm contract customer additions.
• Prepaid net customer additions, including MVNO customers, were 41,000 in the first quarter of 2010, down from 488,000 in the fourth quarter of 2009 and 255,000 in the first quarter of 2009.
  • In the first quarter of 2010, lower MVNO net customer additions were the primary reason for the sequential and year-over-year decrease in prepaid additions.  MVNO customers totaled 2.1 million at March 31, 2010.
  • Additionally, seasonally fewer gross branded prepaid customer additions caused lower sequential prepaid net customer additions.
• Contract customers, including connected devices, comprised 79% of T-Mobile USA’s total customer base at March 31, 2010, consistent with the fourth quarter of 2009 but down from 81% in the first quarter of 2009.

Churn

• Blended churn, including both contract and prepaid customers, was 3.1% in the first quarter of 2010, down from 3.3% in the fourth quarter of 2009 and was consistent with the first quarter of 2009.
• Contract churn decreased in the first quarter of 2010 to 2.2% from 2.5% in the fourth quarter of 2009 and 2.3% in the first quarter of 2009.
  • The sequential fall in churn was due primarily to the fourth quarter being seasonally higher due to the holiday season, consistent with previous years.

Stick Together Highlights

• During the first quarter of 2010, T-Mobile USA received the highest ranking in the J.D. Power and Associates 2010 Wireless Retail Sales Satisfaction Study^SM – Volume 1. Building on a legacy of recognition reflecting T-Mobile USA’s commitment to delivering an industry-leading retail experience, this is the eighth such top ranking from J.D. Power and Associates in the Wireless Retail Sales Satisfaction Study’s past 11 volumes, dating back to 2004.
• T-Mobile USA launched the HTC^® HD2 which features a comprehensive mobile entertainment experience, offering the largest touch screen on a smartphone in the U.S. and comes ready with access to eBooks, movies, television programs and more.
• T-Mobile USA is leveraging its nationwide 3G network through new devices such as the Dell^TM Inspiron^TM Mini 10 netbook and the T-Mobile webConnect Rocket^TM USB laptop stick.  The Dell Inspiron Mini 10 is T-Mobile USA’s first netbook and features built-in access to T-Mobile USA’s 3G wireless broadband service and Wi-Fi capability.  The T-Mobile webConnect Rocket USB laptop stick provides customers with seamless connectivity to the Internet via Wi-Fi or T-Mobile USA’s 3G wireless network and is the first HSPA+ device from a national U.S. wireless carrier.
• On April 21, 2010, T-Mobile USA announced the upcoming, exclusive availability of the new Garminfone^TM, the first Android^TM-powered smartphone fully-integrated with Garmin’s navigation experience.
• On May 4, 2010, T-Mobile USA announced a new addition to its exclusive line of Android^TM-powered T-Mobile myTouch 3G smartphones – the T-Mobile myTouch 3G Slide^TM.  Anticipated to be available in June, the new myTouch 3G Slide combines a slide-out QWERTY keyboard with a high-performance touch screen powered by the latest Android software.