From DailyTech: T-Mobile USA, America's fourth largest carrier announced its Q4 2013 earnings on Tuesday.
The 67 percent Deutsche Telekom AG (ETR:DTE) owned cell phone service provider was closely scrutinized, after beating market leader Verizon Wireless (now a wholly owned subsidiary of Verizon Communications Inc. (VZ)) for two straight quarters in Q2 and Q3 2013.
Verizon posted impressive gains for the quarter, adding 1.653 million total subscribers (1.573 million postpaid, 80k prepaid) to reach 102.799 million (92.6 million postpaid) customers. AT&T Inc. (T) added 809,000 phone customers (566,000 postpaid, 243,000 prepaid), 440,000 tablet cellular customers, and 398,000 connected device customers, to reach 110.4 million wireless subscribers (72.6 million postpaid). Even Sprint Corp. (S) looked vigorous, with 682,000 net adds (58,000 net postpaid adds, 158,000 net prepaid adds, and 466,000 net tablet adds).
The good news for T-Mobile for the quarter was that it gained 1.6 million net customers for the quarter -- in a virtual tie with Verizon. In total T-Mobile gained 981,000 branded subscribers -- better than AT&T or Sprint easily -- including 800,000 postpaid phone customers, 112,000 prepaid phone customers, and 69,000 mobile broadband (tablet) customers.
And it its revenue rose 39.1 percent to reach $6.83B USD. That figure misssed an analyst average expectation of $6.94B USD compiled by Bloomberg. The average revenue per user (ARPU) was $50.70 USD for the quarter, down 2.9 percent from a month ago, and missing analyst hopes of $51.06 USD. To put that number in context, Verizon's industry-leading ARPU was $157.21 USD.
That means the average customer pays a third as much on T-Mobile as on Verizon. That's good news for customers, but not so good news for T-Mobile's earnings.
The affordable contracts came at a cost. The carrier lost $20M USD in Q4 2013, up from $8M USD a year before. The cost of its accelerating LTE deployment led to a 13.2 percent increase in capital expenditures, reaching $4.2B USD. T-Mobile announced with its earnings that it expects this could increase up to 9.5 percent more, coming in at $4.3-4.6B USD this year. That's still small compared to Sprint's planned spending of $8B USD and AT&T's $21B USD capital budget for this year.
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