T-Mobile Racks Up Pre-Paid Subscribers

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Mobile operators have been struggling to shore up their financials as tough economic times see consumers cutting back on mobile phone service and extras in order to make their dollars go further—even as consumer interest in smartphones is stronger than ever. Number four U.S. mobile operator T-Mobile seems to have been able to capitalize on consumers’ desire to save money, announcing that they picked up 371,000 mobile users during the fourth quarter, reversing subscriber losses during the third quarter—and a good deal of that surge comes from pre-paid subscribers accessing T-Mobile services without a contract.

“T-Mobile USA made significant progress in 2009 in expanding its 3G network, improving its 3G-capable device lineup, enhancing its distribution, and underscoring its value proposition,” said Deutsche Telekom CEO René Obermann, in a statement. “This creates a solid foundation to benefit from the robust mobile Internet market.”

Overall, T-Mobile claimed some 33.8 million customers at the end of 2009, up from 33.4 million at the end of the third quarter and 32.9 million at the end of the fourth quarter of 2008—although T-Mobile isn’t gaining customers as fast as market leader Verizon, it at least is no longer losing subscribers (like Sprint). However, the total number of people subscribing to T-Mobile service on contact is actually declining: at the end of 2009, about 79 percent of T-Mobile’s customer base was on contract; that compared to 80 percent at the end of the third quarter of 2009 and 82 percent a year ago. Overall T-Mobile’s revenue for the quarter was $5.41 billion, down from $5.72 billion a year ago—and the primary reason for the decline is as a net decline in the average amount customers are paying the company per month.

Industry reports have speculated that T-Mobile owner Deutsche Telekom is considering an IPO for T-Mobile to help raise money to expand the carrier’s 3G and HSPA+ network infrastructure; neither company has commented publicly on the possibility of an IPO.