T-Mobile sees third quarter revenue fall by almost 7%

T-Mobile sees third quarter revenue fall by almost 7%
T-Mobile’s financial performance continued to cause concerns this week with profits and revenues falling sharply year on year.

The operator’s revenues were at £794m in the three months between July and September, down 6.7% from the same period last year. Profits were 29.4% lower in the third quarter this year than they were in the same period last year, but T-Mobile has marked that the figure has been adjusted.

A more positive interpretation would be that T-Mobile has increased the number of contract customers from the previous quarter this year – 96,000 contract customers this quarter, compared to 56,000 between April and June.

The company managed to stop the loss of customers, which saw it’s base reduced by more than half a million subscribers during the first six months of the year.

UK Jim Hyde has previously registered his focus on contract customers, and particularly data services, and said he was willing to lose low quality prepay customers in a bid to focus on customers spending more than £30 a month.

It is especially encouraging given the tough market conditions and tightening consumer spending.

The spike in contract customers has been squarely attributed to mobile broadband and Sim-only subscriptions.

Revenue and profit falls continue to be a problem for T-Mobile.

Despite the low cost in acquiring dongle and Sim-only customers, T-Mobile’s margins tightened to 22% in Q3 this year compared to 29% in Q3 last year.

The average spend of contract customers fell from £46 to £43, but this is not surprising given the addition of Sim-only and dongle customers.

Hyde said: ‘We’ve continued to improve profitability, avoided the temptation to grow market share at any cost and stayed true to our strategy of prudent customer acquisition. This has clearly paid dividends with total net additions up quarter on quarter.’

Shaun Collins, analyst at CCS Insight said: ‘The ‘you will not get better value for £30’ was a strong proposition and served them well. It worked for getting people from £25 tariffs to £30 tariffs.’

Written by Mobile Today
Mobile Today

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