T-Mobile one-ups Sprint on quarterly results

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Kid BoxersT-Mobile’s next up for quarterly results, and they’ve got a little something to brag about. 857,000 new customers this quarter puts them past double Sprint’s additions, which puts things nicely in contrast. Churn is down to 1.8% from 2.4% last year. Not much change in ARPU, landing at $53. It’s notable that 80% of T-Mobile’s new customers are on contract, which will do well to provide an optimistic long-term outlook. BlackBerry gets props, alongside the Dash and SideKick for solid sales.


Customers
In the second quarter of 2007, T-Mobile USA added 857,000 net new customers, down from 980,000 in the first quarter of 2007, and up from 613,000 in the second quarter of 2006.

Contract customer net additions in the second quarter of 2007 made up 80% of customer growth, up from 74% in the first quarter of 2007, and down from 83% in the second quarter of 2006.

Contract customers comprised 84% of T-Mobile USA’s total customer base at June 30, 2007.

Churn
Contract customer churn was 1.8% in the second quarter of 2007, down from 1.9% in the first quarter of 2007 and 2.2% in the second quarter of 2006.

Blended churn, including both contract and prepaid customers, was 2.7% in the second quarter of 2007, slightly up from 2.6% in the first quarter of 2007 and down from 2.9% in the second quarter of 2006.

On a blended basis, the impact of lower contract customer churn was offset by higher prepaid churn in the second quarter of 2007.

OIBDA and Net Income
T-Mobile USA reported OIBDA of $1.39 billion in the second quarter of 2007, up from $1.22 billion in the first quarter of 2007 and $1.21 billion in the second quarter of 2006.

OIBDA margin was 32% in the second quarter of 2007, up from 30% in the first quarter of 2007 and the same as in the second quarter of 2006.

The sequential margin improvement was due to the continued strength in revenue combined with stable CCPU and slightly reduced CPGA (see below).

Net income for the second quarter of 2007 was $350 million, up 11% from $315 million in the first quarter of 2007 and up 50% from $233 million in the second quarter of 2006.

Revenue
Service revenues, consisting of contract, prepaid, and roaming and other service revenues, rose to $4.20 billion in the second quarter of 2007, up from $3.99 billion in the first quarter of 2007 and $3.59 billion in the second quarter of 2006.

The increase is due primarily to growth in the number of customers and strong contract ARPU (“Average Revenue Per User” as defined in note 1 to the Selected Data, below).

Other revenues were $89 million in the second quarter of 2007, consistent with $88 million in the first quarter of 2007 and down
from $177 million in the second quarter of 2006.

The ongoing migration of Cingular’s customers to its own network following the dissolution of our network sharing venture in early 2005 was the major reason for the year on year fall in other revenues.

In 2007, WiFi revenues were reclassified to contract revenues and roaming and other service revenues (see note 8 to the Selected Data below for further explanation).

Total revenues, including service, equipment, and other revenues were $4.78 billion in the second quarter of 2007, up from $4.55 billion in the first quarter of 2007 and $4.21 billion in the second quarter of 2006.

ARPU
Blended ARPU was $53 in the second quarter of 2007, up from $52 in the first quarter of 2007 and the second quarter of 2006.

Contract ARPU was $57 in the second quarter of 2007, up from $56 in the first quarter of 2007 and up from $55 in the second quarter of 2006, driven by increases in data and airtime revenues.

Data services revenues (see notes 1 and 8 below) were $616 million in the second quarter of 2007, representing 14.7% of blended ARPU, or $7.80 per customer, compared to 14.3%, or $7.50 in the first quarter of 2007, and 10.9%, or $5.70 in second quarter of 2006.

Strong growth in messaging revenue continued to be the most significant driver increasing data ARPU. The total number of SMS and MMS messages increased to 18 billion in the second quarter of 2007, compared to almost 16 billion in the first quarter of 2007 and 8 billion in the second quarter of 2006.

Strong take-up of converged devices, such the T-Mobile SideKick, the T-Mobile Dash and BlackBerry devices, continued during the quarter.

  • ShortDog

    Quick edit – ARPU is $53, not $53,000,000.

  • ShortDog

    Quick edit – ARPU is $53, not $53,000,000.