T-Mobile sees slower subscriber growth, increased churn

When it comes to wireless carrier performance, there are many factors that can point to positive or negative growth. From revenue to profit to ARPU to churn rate, wireless carriers are constantly struggling to bring all aspects of their business well in to the black. But in an increasingly more competitive wireless market, carriers are facing greater challenges to cranking out profits and appeasing investors’ expectations.

T-Mobile’s latest financial figures indicate that they too are having a hard time in the US wireless ecosystem. T-Mobile saw net subscriber additions of 668,000 customers in Q2 2008 (not including the 1.1 million new customers acquired through T-Mobile’s SunCom merger), a decrease in customer growth compared to the 857,000 new customers T-Mobile signed up in Q2 of 2007. Net subscriber growth could have been adversely affected by increased subscriber churn (the ratio between customers leaving T-Mobile and those signing new contracts). T-Mobile’s second quarter churn rate hit 2.7%, up from 2.6% in the first quarter of 2008.

Increased churn can, in turn, be attributed to the expiration of many two-year contracts, which were first introduced by T-Mobile in Q2 of 2006.

On the brighter side of things, T-Mobile managed to scrape together $5.47 billion in revenue, a slight increase compared to the $5.19 billion it earned in the previous quarter and a significant improvement on the previous year’s Q2 revenue of $4.78 billion. The increased revenue was bolstered both by higher ARPU (Average Revenue Per User), which hit $52, as well as the $810 million that it earned through more lucrative data services.

All in all, T-Mobile sees to be doing well for themselves. Which is more than we can say for certain other wireless carriers in the US.