471,000 contract customers leave T-Mobile in Q1

Despite blanketing the television airwaves with its clever ad campaign, T-Mobile lost 471,000 contract customers in the first quarter. The addition of pre-paid accounts reduced the net customer loss to 99,000 in the three month period, up from a net loss of 77,000 customers a year ago. Contract customers are valued more highly than pre-paid subscribers in the cell phone industry because of the contract that locks-in a steady revenue to the carrier and the fact that those on contract tend to spend more on other accessories and extra services.

Speaking of revenue, T-Mobile brought in $4.63 billion in Q1, about the same as last year's figure. Operating earnings before depreciation and amortization came to $1.19 billion in the period, down from the $1.39 billion from the 2010 quarter. The carrier added a million new smartphone users to 9.1 million during the 3 months and contract ARPU rose to $52 from $51. Blended data ARPU, which takes pre-paid customers into account, dropped 20% to $13.10 in the first quarter.

René Obermann, CEO of  T-Mobile's corporate parent Deutsche Telekom, said, "The first quarter shows a mixed picture with positive trends in the development of data ARPU. Our deal with AT&T announced a few weeks ago will not change the focus of our US business. Until the closing of the deal, T-Mobile will continue to challenge its competitors and compete aggressively in the US market."

The carrier says that it is increasing the maximum speed of its network to 42Mbps and the faster pipelines will be accessible to 140 million people by the middle of this year. T-Mobile says that it has already launched the upgrade on certain markets.