T-Mobile expects subscriber churn due to iPhone 4S effect
updated 05:05 am EST, Thu November 10, 2011
T-Mobile expects iPhone 4S to impact Q4
T-Mobile has used its third quarter conference call to admit that it expects to suffer subscriber churn due to the arrival of the iPhone 4S. As the only one of the nation’s four carriers not to sell the iPhone 4S, it has lowered its outlook for the critical fourth quarter in line with its launch. The company said that although it had made net gains in subscribers over the third quarter, it expected to lose a number of subscribers switching carriers “due to competitor launches of the iPhone 4S.”
Overall, its third quarter results were solid. Although it experienced a minor dip in total revenue, its operating income before charges was higher than for the same period last year. Its third quarter revenue was $4.71 billion was, however, up from its second quarter result this year by one percent.
T-Mobile served 33.7 million customers at the end of the third quarter in 2011. This compared with 33.6 million customers at the end of the second quarter this year. Its third quarter net additions were 126,000, which compared positively to a net loss of 50,000 customers in the previous quarter.
“Earnings improved as we continued to focus on making smartphones affordable to all Americans through our unlimited Value plans, improvements to our 4G network, and an expanding portfolio of 4G devices,” said T-Mobile USA CEO Philipp Humm in a statement. “Discipline on the cost side contributed to year-on- year margin improvement, while postpay churn, in particular related to the iPhone 4S launches by competitors, will continue to be an area of concern.”
The company had previously made an appeal to Apple for the iPhone 4S, but although the device supports multiple networks around the globe, it currently does not support the 3G network frequencies employed by T-Mobile.
Junior Member
Joined: Jul 2006
Churn not necessary
The churn doesn't have to be that large. I've got an unlocked iPhone 3G on T-Mobile and I'm disappointed that the company doesn't offer any official support. Call customer service and they sneer, "Oh, you have one of those." T-Mobile certainly has the expertise to make their support of iPhones top-notch. After all, they sell the iPhone in Germany.
T-Mobile also seems to be ignoring good business principles. If customers are leaving you because they have or want to own X, then you make it advantageous for the owners of X to be your customers. T-Mobile should specifically offer iPhone users better plans, plans that include discounted minutes and a dirt cheap EDGE data plan. There's even justification for special treatment in the fact that T-Mobile isn't subsidizing those iPhones and the fact that an iPhone can only access EDGE data rather than 3G.
What T-Mobile needs to do is obvious. It should quit whining. They don't need to sell iPhones to get iPhone users. All they need to do make it better in every way for iPhone owners to join and stick with them. The iPhones are there. The used market for iPhones is huge and growing.
Nor do they need to fear Apple's ire. With the AT&T merger pending, Apple can do nothing. And if the merger doesn't go through, all those millions of happy T-Mobile customers who own older iPhone will prove very tempting to Apple. All it would need to do is tweak its GSM phone a bit to get several million profitable upgrades.