T-Mobile sees subscriber slowdown led by UK
Published: 2 February, 2009
The European cellcos are expected to bear the brunt of the downturn, at least in the early part of the recession, and T-Mobile's results seem to bear this out. The company's US arm was under intense pressure from Verizon Wireless and AT&T, but was still performing better than the country's overall economy, but its key European territories dragged down its mobile subscriber numbers.
The cellco will not report full quarterly results until February 27, but has released details of its subscriber numbers and churn already. It saw net additions worldwide of just 1.7m, down from 3.7m a year earlier, and it actually suffered a decline in its user base in the UK and Netherlands. In the US, it added 621,000 net subscribers in the quarter, mostly in the lower value prepaid segment, compared with 951,000 a year earlier - and this was despite the high profile launch of the Android G1, and the steady roll-out of 3G during 2008. By contrast, Verizon Wireless added 1.37m net subscribers during the quarter, and AT&T added 2.1m. For the year, T-Mobile USA gained 4m new net subscribers, including 1.13m from its SunCom Wireless acquisition, and its total base is now 32.8m.
Like most major telcos, parent Deutsche Telekom is highly reliant on its wireless arm to drive growth and profit, because of intense pressures on wireline activities. So any weakness at T-Mobile is bad news, though the German incumbent tried to brush off the subscriber figures by blaming them on new rules for counting prepaid customers in Germany.
But this did not explain why growth in its US arm was slowing, nor why UK and Dutch consumers were defecting. In the UK, T-Mobile lost 16,000 customers in the quarter, including its Virgin Mobile MVNO users, a loss of 3%, to make a total of almost 16.8m. The UK was the main factor behind overall slow growth across T-Mobile, said the parent company. Worldwide, the cellco ended the year with 128.34m customers, up 6.3% year-on-year, but net additions were down over 55%.
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