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T-Mobile USA saw a healthy increase in data revenues in the third quarter, as its 3G build-out proceeds apace, but this did not stop it losing customers and seeing lower overall ARPU. The US arm of Deutsche Telekom reported Q3 net income of $417m, down from $442m a year earlier, on service revenues down slightly from $4.77bn in Q2 to $4.73m. It ended the quarter with 33.4m subscribers, having lost a net total of 77,000, mainly from the high value postpaid segment.

ARPU was down to $47 - from $48 in Q2 and $52 in the year-ago quarter. The operator said growth in data services was offset by customer migration to unlimited plans and a reduction in roaming. But data services hit 21% of the ARPU total, at $10 per customer, up from 17.3% and $8.90 a year earlier, and generating $1bn. The number of 3G smartphones on the network was up 33% to 2.8m, boosting web usage to offset decline in messaging.

Churn was up from 2.2% in the previous quarter to 2.4%, with the operator blaming "competitive intensity, including handset innovation, and the seasonal impact from the 'back-to-school' window". Including handset innovation in a list of competitive pressures is worrying, coming from the company that has made so much out of its early adoption of Android - it has had its first 'Google phone', the HTC G1, for a year, while Verizon and Sprint are only just entering the game, and it aims to leverage this fact more aggressively in the holiday quarter.

CTO Cole Brodman was pushing this theme during a keynote speech at the Open Mobile Summit in San Francisco this week, arguing that the early commitment to Android showed that T-Mobile had understood "the power of open" before its rivals. The carrier will have four Android phones on sale this quarter (G1, HTC myTouch, Motorola Cliq and Samsung Behold), increasing to eight in the first six months of 2010. He expects that 40% of its Q4 sales will be smartphones, mainly Android and BlackBerry, and claims that Android users consume 50 times the data of others.

To emphasize its Android ties further, T-Mobile plans to roll out its own channel in the Android Market app store and introduce carrier billing, a key customer attraction. As operators and vendors grapple over how the app stores are branded, and who has the key customer contact, this arrangement may highlight the kind of dual-branded compromise many could adopt, giving users the choice of open or carrier-related processes.

TMo's parent Deutsche Telekom reported a 7.2% rise in net profit for the third quarter, to €959m, on revenues up 5.2% to €16.3bn. The US arm contributed to profit growth but Europe was more depressed, with continued decline of fixed line revenues, particularly in Germany, and T-Mobile revenues down across the board in Europe.

Meanwhile, on the Android front, Verizon Wireless duly introduced its second phone, the HTC Eris, to join the Motorola Droid and also debuted the socially oriented LG Chocolate Touch, the first US model in the popular family to sport a touchscreen. The BlackBerry Curve 8530 also joined the holiday line-up.

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