Nov. 10, 2011 at 12:59 PM ET
T-Mobile USA boosted its profits and added to its customer base in the third quarter, but the company Thursday morning warned of future repercussions from its status as the only major U.S. wireless carrier not offering Apple’s iPhone.
“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 Philipp Humm, T-Mobile USA president and CEO, in the company’s earnings release. He added, “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.”
"Churn" is industry lingo for customers leaving for other carriers.
Sprint was added to Apple's lineup of U.S. carriers with the iPhone 4S launch in October, joining AT&T and Verizon. Apple said first weekend sales of the device set a new record for the company.
Deutsche Telekom, T-Mobile USA's parent company, has agreed to sell the U.S. subsidiary to AT&T for $39 billion, but the U.S. Justice Department has filed suit to block the deal. T-Mobile USA said expenses related to the AT&T acquisition were $51 million in the third quarter, “primarily consisting of employee-related costs.”
T-Mobile USA’s quarterly revenues were $4.67 billion, down from $4.71 billion in the same quarter last year. Operating profits excluding certain costs were $1.45 billion, up from $1.32 billion a year ago.
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