T-Mobile USA, Inc. (“T-Mobile USA”), the U.S. operation of Deutsche Telekom AG’s (“Deutsche Telekom” (NYSE: DT)) Mobile Communications business, today announced fourth quarter and full year 2008 customer results.
“2008 was a milestone year for T-Mobile in positioning the company for future success. We continued to generate new channels for growth by launching high-speed wireless data service to the masses and offering customers innovation that adds real value to their lives,” said Robert Dotson, president and CEO, T-Mobile USA. “The aggressive build-out of our 3G network positions us to deliver full-blown 3G services and seize on the significant upside we see in consumer data adoption. And game-changing 3G-enabled devices like the T-Mobile G1 with Google are delivering a steady stream of new mobile services while creating some of the highest levels of customer satisfaction we’ve ever seen at T-Mobile.”
In the fourth quarter of 2008, T-Mobile USA added 621,000 net new customers compared to 670,000 in the third quarter of 2008 and 951,000 in the fourth quarter of 2007. T-Mobile USA’s gross customer addition growth in 2008 compared to 2007 was offset by higher blended churn, as explained below. Net new contract customer additions amounted to 267,000 in the fourth quarter of 2008, or 43% of total net new customer additions, compared to 293,000 or 44% in the third quarter of 2008 and 733,000 or 77% in the fourth quarter of 2007. Contract customers include FlexPay contract customers.
Prepaid net additions were 355,000 in the fourth quarter of 2008, compared to 377,000 in the third quarter of 2008, and up from 218,000 in the fourth quarter of 2007. Prepaid customers include FlexPay no-contract customers.
Contract churn was 2.4% in the fourth quarter of 2008, in line with the third quarter of 2008 and up from 1.8% in the fourth quarter of 2007. Blended churn, including both contract and prepay customers, was 3.3% in the fourth quarter of 2008 and up from 3.0% in the third quarter of 2008 and 2.8% in fourth quarter of 2007. Contract churn continued to be impacted in the fourth quarter of 2008 by customers coming to the anniversary of their two-year contracts (that were first introduced in April 2006) and competitive intensity. Blended churn was also impacted by seasonally higher prepaid churn in the fourth quarter of 2008 compared to the third quarter of 2008.
T-Mobile USA’s launch of 3G services was combined with a significant strengthening of the converged device offering during 2008. With the successful launch of the T-Mobile G1 with Google and the Samsung Behold, both 3G converged devices, nearly 40 percent of devices sold to contract customers in the fourth quarter of 2008 (including both upgrades and new customers) were converged devices, of which more than half were 3G enabled.
For the year ended December 31, 2008, T-Mobile USA added more than 4.07 million net new customers, 2.94 million organic net new customers and 1.13 million acquired as part of the SunCom Wireless, Inc acquisition in February 2008. This compares to 3.64 million net new customers added in 2007. Net contract customer additions in 2008 amounted to 1.8 million, 62% of the total organic customer additions in the year — down from 74% in 2007. Contract customers comprised 82% of T-Mobile USA’s 32.8 million customer base at the end of 2008, compared to 83% in the third quarter of 2008 and fourth quarter of 2007.
T-Mobile USA intends to release fourth quarter and full-year 2008 financial results on February 27, 2009.
SELECTED DATA FOR T-MOBILE USA
| (thousands) | Y/E 08 | Q4 08 | Q3 08 | Q2 08 | Q1 08 | Y/E 07 | Q4 07 | |||||||
| Covered population1 | 288,000 | 288,000 | 286,000 | 284,000 | 284,000 | 284,000 | 284,000 | |||||||
| Customers, end of period | 32,758 | 32,758 | 32,136 | 31,466 | 30,798 | 28,685 | 28,685 | |||||||
| Thereof contract customers | 26,806 | 26,806 | 26,539 | 26,246 | 25,721 | 23,914 | 23,914 | |||||||
| Thereof prepaid customers | 5,952 | 5,952 | 5,597 | 5,220 | 5,077 | 4,771 | 4,771 | |||||||
| Net customer additions | 2,940 | 621 | 670 | 668 | 981 | 3,644 | 951 | |||||||
| Acquired customers | 1,132 | – | – | – | 1,132 | – | – | |||||||
| Contract churn | 2.1% | 2.4% | 2.4% | 1.9% | 1.7% | 1.9% | 1.8% | |||||||
| Blended churn | 2.9% | 3.3% | 3.0% | 2.7% | 2.6% | 2.8% | 2.8% |
1 The covered population statistic represents T-Mobile USA’s GSM / GPRS / UMTS / EDGE 1900 voice and data network coverage, combined with roaming and other agreements.
About T-Mobile USA:
Based in Bellevue, Wash., T-Mobile USA, Inc. is the U.S. operation of Deutsche Telekom AG’s (NYSE: DT) Mobile Communications Business, and a wholly owned subsidiary of T-Mobile International, one of the world’s leading companies in mobile communications. By the end of 2008, 128 million mobile customers were served by the mobile communication segments of the Deutsche Telekom group — 32.8 million by T-Mobile USA — all via a common technology platform based on GSM, the world’s most widely used digital wireless standard. T-Mobile’s innovative wireless products and services help empower people to connect to those who matter most. Multiple independent research studies continue to rank T-Mobile among the highest in numerous regions throughout the U.S. in wireless customer care and call quality. For more information, please visit http://www.t-mobile.com. T-Mobile is a federally registered trademark of Deutsche Telekom AG.
About T-Mobile International:
T-Mobile International is one of the world’s leading mobile communications businesses. As part of the Deutsche Telekom AG (NYSE: DT) group, T-Mobile International concentrates on the key markets in Europe and the United States.
