3G Drives T-Mobile Profits In 2Q - InformationWeek

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01:22 PM

3G Drives T-Mobile Profits In 2Q

T-Mobile said it experienced lower voice revenues, but these were offset by growth in data revenues.

T-Mobile added 325,000 new customers in the second quarter on its way to a $425 million profit.

The wireless operator reported $4.77 billion in service revenues, which was down from $4.85 billion for the same period a year ago. T-Mobile said it was experiencing lower voice revenues, but these were offset by growth in data revenues.

The fourth-largest U.S. carrier continues to see dividends in its 3G network, as mobile data service revenues were up 23% from last year. The 3G-capable T-Mobile G1 continues to be a good seller, and the company just launched another Android-powered handset with the myTouch 3G.

T-Mobile said its 3G network covers 176 cities and reaches 121 million people, and the company expects it to grow throughout the year. T-Mobile is a bit behind though, as rivals AT&T, Sprint Nextel, and Verizon Wireless already have nationwide 3G networks, and some are already in the process of rolling out 4G networks.

"We see opportunities for new growth given the anticipated growing demand for innovative mobile Internet and data services in the U.S. market," said Rene Obermann, CEO of T-Mobile's parent company Deutsche Telekom, in a statement.

T-Mobile now has 33.5 million subscribers, and contract customers represent 81% of its subscriber base. The rate at which customers cancel service, or churn rate, was 2.2%. This is a slight decrease from the first quarter, and T-Mobile attributes this to customer loyalty programs like the $50 unlimited voice plan for long-time customers.

The company also is expanding its retail presence as it signed a deal with RadioShack to offer T-Mobile phones and services in more than 4,000 stores. This deal nearly doubles the number of retail stores that offers T-Mobile products.

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