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T-Mobile expects subscriber churn due to iPhone 4S effect

updated 05:05 am EST, Thu November 10, 2011

T-Mobile expects iPhone 4S to impact Q4

T-Mobile has used its third quarter conference call to admit that it expects to suffer subscriber churn due to the arrival of the iPhone 4S. As the only one of the nation's four carriers not to sell the iPhone 4S, it has lowered its outlook for the critical fourth quarter in line with its launch. The company said that although it had made net gains in subscribers over the third quarter, it expected to lose a number of subscribers switching carriers "due to competitor launches of the iPhone 4S."

Overall, its third quarter results were solid. Although it experienced a minor dip in total revenue, its operating income before charges was higher than for the same period last year. Its third quarter revenue was $4.71 billion was, however, up from its second quarter result this year by one percent.

T-Mobile served 33.7 million customers at the end of the third quarter in 2011. This compared with 33.6 million customers at the end of the second quarter this year. Its third quarter net additions were 126,000, which compared positively to a net loss of 50,000 customers in the previous quarter.

"Earnings improved as we continued to focus on making smartphones affordable to all Americans through our unlimited Value plans, improvements to our 4G network, and an expanding portfolio of 4G devices," said T-Mobile USA CEO Philipp Humm in a statement. "Discipline on the cost side contributed to year-on- year margin improvement, while postpay churn, in particular related to the iPhone 4S launches by competitors, will continue to be an area of concern."

The company had previously made an appeal to Apple for the iPhone 4S, but although the device supports multiple networks around the globe, it currently does not support the 3G network frequencies employed by T-Mobile.

by MacNN Staff



  1. Inkling

    Joined: Dec 1969


    Churn not necessary

    The churn doesn't have to be that large. I've got an unlocked iPhone 3G on T-Mobile and I'm disappointed that the company doesn't offer any official support. Call customer service and they sneer, "Oh, you have one of those." T-Mobile certainly has the expertise to make their support of iPhones top-notch. After all, they sell the iPhone in Germany.

    T-Mobile also seems to be ignoring good business principles. If customers are leaving you because they have or want to own X, then you make it advantageous for the owners of X to be your customers. T-Mobile should specifically offer iPhone users better plans, plans that include discounted minutes and a dirt cheap EDGE data plan. There's even justification for special treatment in the fact that T-Mobile isn't subsidizing those iPhones and the fact that an iPhone can only access EDGE data rather than 3G.

    What T-Mobile needs to do is obvious. It should quit whining. They don't need to sell iPhones to get iPhone users. All they need to do make it better in every way for iPhone owners to join and stick with them. The iPhones are there. The used market for iPhones is huge and growing.

    Nor do they need to fear Apple's ire. With the AT&T merger pending, Apple can do nothing. And if the merger doesn't go through, all those millions of happy T-Mobile customers who own older iPhone will prove very tempting to Apple. All it would need to do is tweak its GSM phone a bit to get several million profitable upgrades.

  1. qazwart

    Joined: Dec 1969


    T-Mobile and the iPhone

    The problem is that the chips in Apple's products are quad band chips that work on the 850Mhz, 900Mhz, 1800Mhz, and 1900Mhz spectrums. However, T-Mobile's 3G/4G network works on the 1700Mhz spectrum.

    For an Apple iPhone or iPad to work on T-Mobile's spectrum, Apple would have to start using the more expensive pent-band chips. The problem is that besides T-Mobile and Cincinnati Bell, and one or two small cell phone providers in Canada and Chile, no one else uses that 1700Mhz band. You can use an iPhone on the much slower Edge network, but that can be painful.

    T-Mobile may have had a better chance of convincing Apple to switch to penta-band chips if T-Mobile never entered into a merger agreement with AT&T. Why should Apple use the more expensive and rarer penta-band chips if it's likely that T-Mobile and the 1700Mhz band would go away? Besides, Apple can sell every single iPhone they make. Why even bother with a cell phone company that's shrinking in importance?

    The merger with AT&T was a terrible idea. It ended up tying T-Mobile's ability to maintain its network. Companies don't want to get into a long term agreement with a company that might disappear in a few months. Many T-Mobile employees have also been leaving. As one told me, if the merger goes through, AT&T doesn't need two customer support teams. Someone is going to lose their job. In fact, that's part of the justification of the merger. And, even if the merger doesn't go through, T-Mobile probably won't survive long now.

  1. webraider

    Joined: Dec 1969


    I guess I'm in the Minority

    I too have an iPhone 3G on Tmobile and I love it. I don't care to have a data plan (I like it because i can sync my contacts on my phone and carry my appointments and make calls. I have Unlimited calling, Data and text for $50 a month. Yes my iPhone uses Edge, but other than that I've been very happy with tMobile. You just can't beat the price and I thought their customer service did a great job of getting me on the network. The spoke with me on the phone and provided step by step instructions with how to activate it. Granted i'm on the no contract prepaid plan, but it was $10 month cheaper than their contract plan that offered the same thing. I hope they continue to be a viable alternative to the big three who like to over charge people who don't care to have a data plan.

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