T-Mobile USA data revenues increase 28 percent in Q3

Deutsche Telekom AG reported third-quarter net profits of €895 million ($1.16 billion), with its T-Mobile USA subsidiary adding 670,000 customers, on pace with the operator's second quarter but 22 percent below net additions a year earlier. By the end of Q3, T-Mobile USA boasted 32.1 million subscribers and OIBDA of $1.53 billion, up 8 percent over the third quarter of 2007. However, contract customer net additions decreased and now make up close to 44 percent of customer growth, down from 80 percent in the previous quarter of 2008 and 65 percent off from a year ago. Contract customer churn grew to 2.4 percent in the third quarter of 2008, up from 1.9 percent in the second quarter of 2008 and 2.0% in Q3 2007--T-Mobile USA blamed the sequential increase on competitive pressures as well as the continued impact of two-year contracts signed in April 2006 reaching their expiration date.

According to T-Mobile USA, service revenues increased 13 percent year-over-year to $4.9 billion, with data services revenue growing 28 percent over the previous year to $850 million, representing 17.3 percent of blended ARPU, or $8.90 per customer, compared with 16.6 percent of blended ARPU ($8.60 per customer) in the previous quarter. Mobile messaging remains the predominant driver of data ARPU: T-Mobile USA subscribers sent or received almost 49 billion messages in the third quarter of 2008, compared to 41 billion in the second quarter of 2008 and 21 billion in the third quarter of 2007. T-Mobile USA adds its myFaves unlimited rate plan remains popular with customers, with over 7 million myFaves customers at the end of Q3, up from 6.5 million at the end of the previous quarter of 2008 and 3.5 million a year earlier.

T-Mobile USA's fourth-quarter results should prove particularly interesting. According to the operator, its 3G network will cover more than 120 cities by the end of November, an expansion that coincides with its late October release of the G1, the first commercial handset powered by Google's Android mobile operating system. In addition, T-Mobile USA is reportedly poised to revamp its mobile data pricing structure along the lines of the unlimited data plans introduced in conjunction with the G1: According to unofficial T-Mobile blog TmoNews, the company will introduce unlimited data and messaging for $34.99 per month across its entire handset portfolio, including BlackBerry devices--the new unlimited plans will be soft-capped at 10GB of usage, after which speeds will be limited to 50kbps.

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