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T-Mobile Releases Q4 Results: Revenues Up but New Subscribers Down
      02/27/09 10:23 AM

T-Mobile USA today reported fourth quarter 2008 results. The results show that various service revenues are up compared to the same quarter last year, but net new customers are down. Here are some highlights of the quarterly and yearly results:


In the fourth quarter of 2008, T-Mobile USA reported OIBDA of $1.57 billion, up 18% compared to the fourth quarter of 2007, data services revenues up 31% compared to the fourth quarter of 2007, and service revenues of $4.9 billion, up 12% compared to the fourth quarter of 2007.

Customers:

? In the fourth quarter of 2008, T-Mobile USA added 621,000 net new customers, down from 670,000 in the third quarter of 2008, and down from 951,000 in the fourth quarter of 2007.
o The number of net new customer additions was down slightly compared to the third quarter of 2008 despite higher gross customer additions. This is primarily due to higher blended churn, as explained below. Gross customer additions were higher both sequentially and compared to the fourth quarter of 2007.
o Contract customer net additions made up almost 43% of customer growth, compared to 44% in the third quarter of 2008 and 77% in the fourth quarter of 2007.
o Prepaid net additions were 355,000 in the fourth quarter of 2008, down from 377,000 in the third quarter of 2008 and up from 218,000 in the fourth quarter of 2007. The sequential decrease in prepaid net customer additions was primarily due to seasonally higher prepaid churn.
? Contract customers comprised 82% of T-Mobile USA?s total customer base at December 31, 2008. T-Mobile USA ended 2008 with 32.8 million customers.

Churn:

? 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.
o 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, including both contract and prepaid customers, was 3.3% in the fourth quarter of 2008, up from 3.0% in the third quarter of 2008 and 2.8% in the fourth quarter of 2007. Blended churn was also impacted by seasonally higher prepaid churn in the fourth quarter of 2008 compared to the third quarter of 2008.


Revenue:

? Service revenues (as defined in Note 1 to the Selected Data, below) were $4.90 billion in the fourth quarter of 2008, in line with the third quarter of 2008, and up from $4.37 billion in the fourth quarter of 2007.
o The increase in service revenues year over year was primarily due to the growth in contract customers and the SunCom Wireless acquisition.
? Total revenues, including service, equipment, and other revenues were $5.72 billion in the fourth quarter of 2008, up from $5.51 billion in the third quarter of 2008 and $5.07 billion in the fourth quarter of 2007.
o The sequential growth in total revenues in the fourth quarter of 2008 compared to the third quarter was due to higher equipment revenues driven by new devices such as the T-Mobile G1 with Google.
o The acquisition of SunCom contributed $189 million to T-Mobile USA?s total revenues in the fourth quarter.

ARPU:

? Blended Average Revenue Per User (?ARPU? as defined in note 1 to the Selected Data, below) was $50 in the fourth quarter of 2008, compared to $52 in the third quarter of 2008 and the fourth quarter of 2007. Rounding movements account for approximately $1 of the sequential fall in blended ARPU, and the remaining difference is explained below.
? Contract ARPU was $54 in the fourth quarter of 2008, down from $55 in the third quarter of 2008 and $56 in the fourth quarter of 2007.
o The decrease in contract ARPU sequentially and year over year was primarily due to lower usage based revenues from contract customers.
? Prepaid ARPU was $23 in the fourth quarter of 2008, down from $24 in the third quarter of 2008 and higher than $20 in the fourth quarter of 2007.
o The decrease quarter over quarter was primarily driven by new customer additions being added late in the fourth quarter.
o The increase in prepaid ARPU year over year is due to higher ARPU products such as FlexPaySM no-contract.
? Data services revenue (as defined in Notes 1 and 9 to the Selected Data, below) was $905 million in the fourth quarter of 2008, representing 18.5% of blended ARPU, or $9.30 per customer, up from 17.3% of blended ARPU, or $8.90 per customer in the third quarter of 2008, and 15.8% of blended ARPU, or $8.20 per customer in the fourth quarter of 2007. Data services revenue increased 31% in the fourth quarter of 2008 versus the fourth quarter of 2007, up from an increase of 28% in the third quarter of 2008 versus the third quarter of 2007.
o Growth in messaging revenue continued to be the most significant driver of data ARPU, as customers continue to purchase plans that include messaging, including unlimited voice and data plans. The total number of messages carried on the T-Mobile USA network increased to 57 billion in the fourth quarter of 2008, compared to 49 billion in the third quarter of 2008 and 24 billion in the fourth quarter of 2007.
o Continued growth in converged device users was another significant driver for increased data revenues. This includes 3G-enabled devices such as the T-Mobile G1 and the Samsung BeholdTM.
o T-Mobile USA launched web2go in the fourth quarter of 2008, creating an improved Web browsing experience on select devices.




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Edited by LisaG (02/27/09 11:23 AM)

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