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T-Mobile USA Customer Losses Continue To Mount

05/10/2012 | 03:07pm US/Eastern
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--T-Mobile lost 510,000 contract customers

--T-Mobile held customer turnover in check

--T-Mobile still hunting for more spectrum

(Adds details beginning in first paragraph.)

 
   By Greg Bensinger and Shara Tibken 
   Of  
 

T-Mobile USA reported it lost more than a half million of the most lucrative customers in this year's first three months, marking the 15th straight quarter of contract user losses.

The drop puts the carrier further behind AT&T Inc. (>> AT&T Inc.) and Verizon Wireless (VZ) in the race to lock users into two-year commitments and could make T-Mobile's recovery even more difficult after regulators blocked its plan last year to be taken over by AT&T for $39 billion.

T-Mobile, the fourth-biggest U.S. carrier, put its strategic plans on hold last year while awaiting government approval of the AT&T deal and watched its subscriber rolls shrink. The Bellevue, Wash.-based company is the largest remaining carrier without the Apple Inc. (>> Apple Inc.) iPhone, another competitive advantage that has hurt its ability retain users.

Chief Executive Philipp Humm vowed to return the company to customer gains. "We've always said that in 2013, 2014 is when we want to be net positive" on contract customer gains, Humm said in an interview Thursday.

T-Mobile said it lost 510,000 branded contract customers in the first quarter, an improvement from the 706,000 lost in the year-earlier period, though still behind its biggest rivals. T-Mobile did lower the rate at which users leave, known as churn, to 2.5% from 3% in the fourth quarter.

The carrier and MetroPCS Communications Inc. (>> MetroPCS Communications Inc) may be holding discussions about a merger that would lead to an initial public offering of the new company, controlled by T-Mobile parent Deutsche Telekom AG (>> Deutsche Telekom AG), according to a report by Bloomberg News on Wednesday. Humm declined to comment on the report, though he said he is hoping to acquire more wireless airwaves, or spectrum.

Humm told reporters on a conference call Thursday that it was his goal to become a "self-funding platform."

Though T-Mobile has announced plans to roll out a high-speed mobile broadband network sometime next year, using spectrum it acquired from AT&T as part of the deal breakup fee, it will be at least two years behind Verizon Wireless in introducing the technology.

In the interview, Humm said he opposed a deal by Verizon Wireless to acquire about $3.9 billion worth of spectrum from a group of cable companies because he hoped to buy the airwaves himself. "The FCC should deny the application," said Humm.

Overall, T-Mobile added 187,000 customers, due in part to a 249,000 gain in prepaid subscribers. Prepaid rivals MetroPCS and Leap Wireless International Inc. (LEAP) both lost customers during what is traditionally the strongest season of the year.

-By Greg Bensinger, Dow Jones Newswires; 212-416-4676; greg.bensinger@dowjones.com; and Shara Tibken, Dow Jones Newswires; 212-416-2189; shara.tibken@dowjones.com

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