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T-Mobile Q2 Subs, Profits Fall

8/04/2011 02:28:25 PM Eastern
 Bellevue, Wash. - T-Mobile USA's subscriber base and revenues continued to shrink in the second quarter and first half following full-year 2010 declines both metrics, parent Deutsche Telekom said.

"The contract-customer situation remains unsatisfactory, with the churn rate remaining at 2.4 percent," Deutsche Telekom said of its U.S. operations.

The parent company also revealed that it cut its U.S. employee ranks by an average 6.4 percent in the half compared with the year-ago period. "This decrease was due in part to fewer customer support employees driven by lower customer care call volumes and a decrease in the number of retail employees due to the implementation of labor efficiency and store rationalization programs," the company said.

T-Mobile's total net revenues slipped 16.2 percent in the quarter to 3.51 billion euros and by 9 percent in the half to 7.28 million euros. Excluding currency fluctuations, revenues would have been down only 5.1 percent and 3.7 percent, respectively.

Operating profits (earnings before interest and taxes) rose 44.7 percent in the quarter to 868 million euros and by 10.9 percent for the half to 1.27 billion euros but only because the company began excluding depreciation as a result of its deal to sell T-Mobile to AT&T.

Net subscriber losses (combining postpaid and prepaid subs) in the quarter came to 50,000, down from 93,000 in the year-ago quarter and down sequentially from the first quarter's 99,000 net losses. Subscriber losses in all of 2010 were 56,000 following a 2009 gain of 1.03 million subscribers.

The carrier's subscriber base at the end of the first half same to 33.6 million.

In the quarter and half, contract subscribers fell while prepaid subscribers rose. In the quarter, the number of contract subscribers contracted by 281,000, up from the year-ago loss of 106,000. Net prepaid subs rose by 231,000 compared with year-ago losses of 199,000.

For the half, contract subs fell by 663,000, up from year-ago losses of only 12,000. The number of net new prepaid subs rose by 513,000 compared with year-ago losses of 158,000.

Total churn, combining prepaid subscribers, was higher at 3.3 percent in the quarter. For the half, total churn was 3.4 percent, up from a year-ago 3.2 percent.
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