There’s no end in sight for T-Mobile’s subscriber drain. After losing 510,000 contracted subscribers in the first quarter of 2012, T-Mobile announced this morning that it has lost 557,000 in its second quarter.
The carrier reported profits of $207 million (down from $212 million last year) on $4.9 billion in revenue (down 3.3 percent from last year). Still, T-Mobile reports that its profitability has improved, with EBITDA (earnings before interest, taxes, depreciation, and amortization) up 18.6 percent from last year.
T-Mobile added 227,000 prepaid subscribers — likely due to its low-cost phones and prepaid plans. But it’s worth noting that prepaid customers are far less valuable to carriers, since they’re not tied to contracts. Average revenue per user fell 4.3 percent across prepaid and contract customers (mostly due to the rise of prepaid users).
The carrier is pushing forward with its $4 billion plan to build out a LTE 4G network next year, but it’s going to have to work doubletime to attract subscribers after losing them in droves. T-Mobile is currently the only major U.S. carrier not offering the iPhone, but that could change next year once it rolls out LTE. I find it hard to imagine that T-Mobile customers will be patient enough to wait for that though.
Even T-Mobile’s former CEO Philipp Hum didn’t have enough faith in the carrier to stick around (he’s now heading up Vodafone’s European operations). T-Mobile COO Jim Allings is currently serving as interim CEO, but the company will need to find some strong leadership soon if it’s to survive the next few years.
Since this time last year, T-Mobile’s contracted subscriber numbers fell 9 percent from 23.4 million to 21.3 million, while prepaid customers jumped 22 percent to 5.3 million. Overall, T-Mobile had 33.2 million customers at the end of the quarter, down slightly from the 33.4 million customers last year.