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How bad are things for fourth-place U.S. carrier T-Mobile? Apparently, so bad that they issue a press release to announce fourth-quarter operating results which mentions being “negatively impacted” by the release of the iPhone 4S on three other carriers, right in the first sentence.
T-Mobile USA parent Deutsche Telekom has announced their Q4 2011 financials, but the news isn’t all that fantastic for the nation’s fourth-place carrier. The failure of the AT&T marriage was certainly a blow, although ultimately T-Mo benefitted from the loss with a $3 billion cash payment in December, plus additional spectrum and roaming for its customers.
The problem is one of diminishing returns, as T-Mo USA bled 526,000 customers in the fourth quarter after gaining 126,000 in the third quarter; the carrier only lost 23,000 in the same quarter a year ago.
“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,” the press release notes. “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.”
Revenue dropped from $4.69 billion a year ago to $4.57 billion, which doesn’t sound so bad considering the carrier is still serving 33.2 million customers. “However, not carrying the iPhone led to a significant increase in contract deactivations in the fourth quarter of 2011,” explained T-Mo USA president and CEO Philipp Humm. “In 2012 and 2013, T-Mobile USA will invest to get the business back to growth, including an incremental $1.4 billion investment in its network modernization initiative, which will total a $4 billion investment over time.”
So how will T-Mobile USA get its mojo back? It’s all about LTE, which the carrier plans to start deploying in 2013 on the AWS spectrum it received as a bonus for the AT&T merger not going through as planned. “This anticipated network transformation will significantly enhance coverage and performance for customers,” the press release notes -- assuming there are many left by the time it lights up.
Perhaps the real question is: Will the 2012 iPhone finally go pentaband (if not LTE) to allow for 3G/4G data on T-Mobile? If so, we can see a healthy market for unlocked iPhone 5 models later this year…
Follow this article’s author, J.R. Bookwalter on Twitter
(Image courtesy of CellularPCS.com)