T-Mobile’s revenue and total subscribers took a hit from April to June, as the carrier’s pending merger with AT&T scares away customers.
The Bellevue, Wash.-based carrier’s revenue dropped only slightly in the second quarter, but the company’s profits fell by nearly half from the same period last year. T-Mobile also reported it had lost 50,000 customers, bringing its total to 150,000 lost for the year. The carrier lost just 56,000 subscribers in all of 2010.
T-Mobile has made several moves to attract new customers and hold onto existing ones over the past several months. The carrier increased its 4G network to reach 170 million consumers in the U.S., came up with special offers like one year of free data for new subscribers and even brought back unlimited data options to differentiate itself from AT&T and Verizon. Despite T-Mobile’s efforts, however, customers still leave the carrier in droves.
The company’s struggles come at a time when its proposed $39 billion merger with AT&T is beginning to pick up steam, which may be a reason customers are jumping ship.
Sprint and its CEO Dan Hesse have long opposed the merger, claiming it will lead to higher prices and a bad market for consumers. The increased rate at which customers are abandoning T-Mobile may indicate a good number of subscribers are not fans of the merger, either. AT&T ranked last on J.D. Power and Associates’ most recent study on customer service among cell carriers in the U.S.
The Federal Communications Commission is not expected to reach a decision on the merger until early next year, but that hasn’t stopped consumers from making their voices heard. Last month, a group of AT&T customers filed a lawsuit against the merger, claiming it violates the Clayton Antitrust Act and may hurt consumers by limiting competition in the wireless market.
However, the merger has attracted supporters, who are increasingly speaking out. Attorney generals from Arkansas, Utah, Alabama, Georgia, Kentucky, Michigan, Mississippi, North Dakota, South Dakota, West Virginia and Wyoming all said they believe the merger will bring better service and faster data speeds to their states, which have high proportions of rural areas.
The road to the FCC’s final decision on the T-Mobile/AT&T merger will likely feature several twists and turns. But even as the scales begin to tip ever so slightly, T-Mobile customers who oppose the merger may not stick around to see the final outcome.