T-Mobile USA posted solid Q1 growth: The No. 4 carrier signed up 981,000 net new subscribers during the quarter, likely at the expense of struggling, larger rival Sprint Nextel (S). That’s about the same number of customers they signed up during Q1 2007 — not bad.
T-Mobile, a division of Deutsche Telekom (DT), passed the 30 million subscriber milestone for the first time, finishing the quarter with 30.8 million subs.
Speaking of Sprint, DT management didn’t have much to say about a report that it was considering a bid for the No. 3 U.S. carrier. T-Mobile didn’t want to “nourish” any rumours or speculation, it said. The company did say it would be “very disciplined” with any acquisitions, which could rule out a risky bid for Sprint. If DT bought Sprint, it would be the No. 1 U.S. wireless carrier with more than 80 million subscribers.
T-Mobile posted $5.2 billion in Q1 revenue, up 14% year-over-year. Operating earnings jumped 18% year-over-year to $1.4 billion.
Churn, the percentage of subscribers who leave the service every month, stayed flat year-over-year at 2.6%. But churn dropped for subscribers who are on long-term contracts, to 1.7% from 1.9% during Q1 2007. This is good news.
Deutsche Telekom itself didn’t do so well: Net income jumped 33% y/y to $1.16 billion, but revenue dropped 3.1% y/y to $23.1 billion, missing analysts’ estimates by about $200 million. Mostly to blame: Its enterprise business, UniCredit analyst Thomas Friedrich tells the AP.
LIVE Conference call notes:
– Going over highlights from earnings release. Huge growth in text/picture messaging.
– Despite “tough market conditions” and Euro exchange rate, still sticking to guidance, dividend.
– By the way, this Flash-based earnings call stream is excellent. It’s time other companies get with the program and stop using 1998 technology like Windows Media and RealPlayer.
– Will be “very disciplined” with any acquisitions. Have to make sense financially. Won’t nourish any rumours or speculation on M&A.
– Line losses in Europe? Don’t expect a sharp acceleration.
– 3G in U.S.: any targets on pop coverage or penetration you could see in next few years? How quickly will you attempt to migrate subs to 3G? Aiming to cover 150 million people by end of 2009.
– No comment on how many subscribers it stole from Sprint last quarter.
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