The second month of 2011 is quickly coming to a close, and all of the major wireless providers have finally reported their numbers from the last quarter of 2010. Sprint has finally turned things around and saw the first net gain in subscribers since 2007; AT&T experienced a rather significant growth and is still playing catch up to Verizon; and Big Red surpassed the 94 million subscriber mark and continues to grow. As the other three major players all experienced an increase in the closing of 2010, T-Mobile's numbers weren't so promising.
They shouldn't be entering panic mode just yet, but they're definitely slipping. Their total lost of contracted subscribers was 318,000 while they added 295,000 prepaid customers. This equates to a net loss of 23,000 customers. Looking at this in comparison to 137,000 net additions in Q3 2010 and the fact that their blended churn – something carriers want to keep down – has jumped from 3.1% to 3.6% between Q1 and Q4, things don't look so great for Magenta.
This may be as a result of less-than-satisfied customers. As you may recall from December, AT&T was rated the worst carrier in the US by Consumer Reports. US Cellular and Verizon topped the list respectively and Sprint held steady in the middle. T-Mobile, on the other hand, hung out around the bottom with AT&T. They were ranked one above the “worse” rating for service in value, voice, texting, and data. As far as customer support goes, they were rated one below “better” for over the phone support, and neutral in all remaining categories.
The good news is that even with a net loss in subs, T-Mo managed to earn more in service revenues; $4.69 billion, up from $4.65 billion in Q4 2009. This is likely due to the addition of one million 3G/4G smartphone users, which brings the total to 8.2 million.
While T-Mobile is undoubtedly happy about the increase in service revenues and strong adoption of smartphones, there is little else to be excited about. Luckily, T-Mobile recognizes that there is an issue and appears to be fairly proactive about it. Philipp Humm, President and CEO of T-Mobile USA, stated, “...high contract churn and significant contract customer losses in the fourth quarter of 2010 indicate that we still have a fair amount of work ahead of us and that any turnaround will take time. With the ongoing implementation of our challenger strategy we are laying the foundation for improved performance going forward.”
While it may not be very clear what the actual cause of their losses are, T-Mobile is aware and already has a plan in effect to work against their subscriber losses. 2011 is just starting and things for T-Mobile seem fairly promising. They have some pretty serious devices slated to hit the shelves in the coming months, changes in plan prices, and rumors of the HTC Pyramid have been floating around. Considering that they also have plans to upgrade to 42Mbps during the second half of this year, T-Mobile has a lot going on.
T-Mobile customers may be content, but they obviously aren't thrilled over their current service. Subscriber loss may – in the long run – be a good thing for T-Mobile. They haven't lost money from it, but it has given them the proper motivation to improve their services, prices, and smartphone lineup.