Customers
* T-Mobile USA served 33.8 million customers at
the end of the third quarter of 2010, up from 33.6 million at the
end of the second quarter of 2010, and 33.4 million at the end of
the third quarter of 2009.
o In the third quarter of 2010, net customer
additions were 137,000, compared to a net decline of 93,000 in the
second quarter of 2010 and a net decline of 77,000 in the third
quarter of 2009.
o Sequentially and year-on-year, the number of net
new customer additions increased due primarily to higher net prepaid
customer additions.
* Contract net customer losses were 60,000 in the
third quarter of 2010, compared to 106,000 net contract customer
additions in the second quarter of 2010, and 140,000 net contract
customer losses in the third quarter of 2009.
o Connected device net customer additions,
included within contract customers, were strong in the third quarter
of 2010, but were offset by traditional postpay and FlexPaySM
contract net customer losses.
o Sequentially, the decline in net contract
customers was driven primarily by churn as strong gross contract
additions were more than offset by the impact from competitive
intensity.
o Year-on-year, net contract customer losses
improved, driven primarily by improvements in traditional postpay
customer gross additions.
o Connected device customers totaled 1.8 million
at September 30, 2010.
* Prepaid net customer additions, including MVNO
customers, were 197,000 in the third quarter of 2010, compared to
199,000 net prepaid customer losses in the second quarter of 2010
and 63,000 net prepaid customer additions in the third quarter of
2009.
o Traditional prepaid and MVNO customer additions
drove the sequential increase in prepaid net customer additions
compared to the second quarter of 2010.
o Year-over-year, higher MVNO net customer
additions driven by new partners were the primary reason for the
increase in prepaid net customer additions. MVNO customers totaled
2.4 million at September 30, 2010.
Churn
* Blended churn, including both contract and
prepaid customers, was 3.4% in the third quarter of 2010, consistent
with the second quarter of 2010 and the third quarter of 2009.
* Contract churn was 2.4% in the third quarter of
2010, up from 2.2% in the second quarter of 2010 and consistent with
the third quarter of 2009.
o The sequential increase in contract churn was
due primarily to competitor handset offers.
* Prepaid churn decreased in the third quarter of
2010 to 7.2% from 7.6% in the second quarter of 2010 and 7.4% in the
third quarter of 2009.
o The sequential decrease in prepaid churn was due
primarily to improvements in traditional prepaid customer churn
during the third quarter of 2010.
o The FlexPay no-contract product was the primary
reason for the year-on-year decrease in prepaid churn.
OIBDA and Net Income
* T-Mobile USA reported OIBDA of $1.32 billion in
the third quarter of 2010, down from $1.42 billion in the second
quarter of 2010, and $1.56 billion in the third quarter of 2009.
o Sequentially, level service revenues were offset
in particular by higher network costs related to the new mobile
broadband network and higher bad debt expense associated with new
products, such as equipment installment plans.
o Compared to the third quarter of 2009, OIBDA
decreased due primarily to a higher equipment subsidy loss driven by
customers adopting more costly smartphones with mobile broadband
data plans and by higher gross customer additions.
* OIBDA margin (as defined in Note 7 to the
Selected Data, below) was 28% in the third quarter of 2010, down
from 30% in the second quarter of 2010 and 33% in the third quarter
of 2009.
* Net income in the third quarter of 2010 was $320
million, compared to $404 million in the second quarter of 2010 and
$417 million in the third quarter of 2009.
Revenue
* Service revenues were $4.71 billion in the third
quarter of 2010, level with $4.70 billion in the second quarter of
2010, but down slightly from $4.73 billion in the third quarter of
2009.
o Service revenues were level sequentially as data
revenue growth, driven by the adoption of mobile broadband data
revenue plans, was offset by lower voice revenues.
o Year-on-year, quarterly service revenues
declined due primarily to fewer branded customers (wireless
customers excluding MVNO and connected devices). However, the 0.5%
decrease in quarterly service revenues year-on-year in the third
quarter of 2010 was an improvement from the 1.4% year-on-year
decrease in the second quarter of 2010.
* Total revenues, including service, equipment,
and other revenues were $5.35 billion in the third quarter of 2010,
consistent with $5.36 billion in the second quarter of 2010, but
down slightly from $5.38 billion in the third quarter of 2009.
o Compared to the third quarter of 2009, the
slight decrease in total revenues was due primarily to lower service
revenues as described above.
ARPU
* Blended Average Revenue Per User (“ARPU” as
defined in Note 1 to the Selected Data, below) was $47 in the third
quarter of 2010, consistent with the second quarter of 2010 and the
third quarter of 2009.
* Contract ARPU was $52 in the third quarter of
2010, in line with the second quarter of 2010 and the third quarter
of 2009.
o Sequentially and year-on-year, ARPU was
consistent as data revenue growth offset the decline in voice
revenues.
* Prepaid ARPU was $19 in the third quarter of
2010, up from $18 in the second quarter of 2010 but down from $20 in
the third quarter of 2009.
o Compared to the second quarter of 2010, prepaid
ARPU increased due to customers moving to unlimited usage plans.
o The decrease compared to the third quarter of
2009 was due primarily to proportionally fewer traditional prepaid
and FlexPay no-contract customers and a higher proportion of MVNO
customers in the prepaid customer base.
* Data service revenues (as defined in Note 1 to
the Selected Data, below) were $1.26 billion in the third quarter of
2010, up 25% from the third quarter of 2009. Data service revenues
in the third quarter of 2010 represented 27% of blended ARPU, or
$12.40 per customer, up from 25% of blended ARPU, or $11.60 per
customer in the second quarter of 2010, and 21% of blended ARPU, or
$10.00 per customer in the third quarter of 2009.
o 7.2 million customers were using smartphones
operating on the T-Mobile USA UMTS/HSPA/HSPA+ network such as the
Samsung VibrantTM, HTC HD2 and BlackBerry® BoldTM 9700 at the end of
the third quarter of 2010. This was an increase of 11% from 6.5
million customers as of the second quarter of 2010 and more than
double the 2.8 million customers as of the third quarter of 2009.
Smartphone customers now account for 21% of total customers, up from
19% in the second quarter of 2010 and 8% in third quarter of 2009.
o The increase in the number of customers using
smartphones and the continued expansion of the upgrade of the
network are driving Internet access revenue growth with the
increasing adoption of mobile broadband data plans. Additionally,
messaging continues to be a significant component of blended data
ARPU.
