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T-MOBILE USA Reports Fourth Quarter 2011 Operating Results

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Thursday, 23 February 2012

T-MOBILE USA Reports Fourth Quarter 2011 Operating Results


Bellevue, Wash. - Feb. 22, 2012
2012-02-23 02:07:24
Strong adjusted OIBDA and prepaid performance; contract business negatively impacted in the fourth quarter of 2011 by iPhone 4S launches by three nationwide competitors

Adjusted OIBDA increased by 4.3% year-on-year to $1.4 billion in the fourth quarter of 2011, adjusted OIBDA margin improved 2 percentage points year-on-year to 31% in the fourth quarter of 2011
Branded contract losses improved through the third quarter of 2011, however the launch of the iPhone 4S reversed this trend to a branded contract customer loss of 706,000 in the fourth quarter of 2011
Strong branded prepaid additions of 220,000 in the fourth quarter of 2011, primarily due to continued success of unlimited Monthly 4G prepaid plans
Service revenues down 2.7% year-on-year to $4.6 billion in the fourth quarter of 2011, due to branded contract customer losses and revenue effects from the shift to unlimited Value plans
Branded contract ARPU increased $2 year-on-year to $58 in the fourth quarter of 2011, mainly driven by an increase in data ARPU
Branded Data ARPU increased $2.70 year-on-year to $16.50 in the fourth quarter of 2011
T-Mobile USA is reinvigorating its challenger strategy, which includes a major network modernization plan to launch LTE in 2013
On December 20, 2011 T-Mobile USA's proposed sale to AT&T, Inc. was terminated; due to the termination of the sale near year-end, T-Mobile USA's annual impairment assessment of indefinite-lived assets is still ongoing


T-Mobile USA, Inc. ("T-Mobile USA") today reported fourth quarter 2011 results and provided an update on its annual assessment of indefinite-lived assets recorded in its financial statements. In the fourth quarter of 2011, T-Mobile USA reported service revenues of $4.57 billion, down from $4.69 billion in the fourth quarter of 2010, and adjusted OIBDA of $1.40 billion, up from $1.34 billion reported in the fourth quarter of 2010. Blended ARPU in the fourth quarter of 2011 was $46, consistent with the fourth quarter of 2010. Additionally, net customer losses were 526,000 in the fourth quarter of 2011, compared to 23,000 net customer losses in the fourth quarter of 2010.

"In 2011, T-Mobile USA showed solid financial performance with a remarkable adjusted OIBDA turn-around in the second half of the year, despite nine challenging months during the pending acquisition. We further increased our 4G data speed to 42 Mbps, expanded our sales channels, launched 25 new 4G handsets and significantly improved our operational efficiency. As a result, adjusted OIBDA rose again year-on-year in the fourth quarter of 2011 and branded data ARPU grew 20 percent year-on-year as smartphone adoption accelerated," said Philipp Humm CEO and President of T-Mobile USA. "However, not carrying the iPhone led to a significant increase in contract deactivations in the fourth quarter of 2011. In 2012 and 2013, T-Mobile USA will invest to get the business back to growth, including an incremental $1.4 billion investment in its network modernization initiative, which will total a $4 billion investment over time."

"Though we are not satisfied with the contract customer losses and the decreased total revenues, the quarterly margin improvement year-on-year was impressive. The spectrum gained through the break-up fee empowers T-Mobile USA to start LTE-based services in key US markets and strengthens its competitiveness," said René Obermann, CEO of Deutsche Telekom.

Total Customers
T-Mobile USA served 33.2 million customers (as defined in Note 1 to the Selected Data, below) at the end of fourth quarter 2011, compared to 33.7 million customers at both the end of third quarter 2011 and the end of fourth quarter 2010.
Fourth quarter 2011 net customer losses of 526,000, compared to net customer additions of 126,000 in the third quarter of 2011, and net customer losses of 23,000 in the fourth quarter of 2010.
The sequential and year-on-year increase in customer losses is a result of intense competitive pressure from the launch of the iPhone 4S by three nationwide competitors in the fourth quarter of 2011. In addition, higher connected device deactivations contributed significantly to the net customer loss in the fourth quarter of 2011, including a nearly 265,000 deactivation related to one customer with a yearly service revenue impact of less than $1 million.


 
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