T-Mobile blames the lack of the iPhone for customer defection

Mon, Feb 27, 2012


The power of the iPhone to attract new customers to a carrier is undeniable, and the lack thereof can also result in mass customer defection. Indeed, before Sprint began carrying the iPhone 4S this past October, CEO Dan Hesse said, point blanky, that the iPhone was the main reason Sprint subscribers were leaving for other carriers.

As it stands now, T-Mobile remains the only US-based carrier without the iPhone on its network – at least in an official capacity. And truth be told, T-Mobile is hurting as a result.

Last week, T-Mobile released their earnings for the fourth quarter of 2011 and noted that they had lost over 800,000 subscribers during the last 3 months of 2011. Notably, T-Mobile attributed the mass exodus of subscribers to the fact that it doesn’t yet carry the iPhone.

Sequentially, the decline in branded net contract customers was driven primarily by higher branded contract deactivations as a result of the launch of the iPhone 4S by three nationwide competitors in mid-October.

And right at the top of its press release, T-Mobile noted that its contract business in the fourth quarter of 2011 was “negatively impacted” by the iPhone 4S launch. The fact that T-Mobile would go so far as to specifically make multiple references to the iPhone in its earnings statement speaks volumes.

Weeks before Apple introduced the iPhone 4S, there was considerable speculation regarding whether or not T-Mobile and Sprint would begin carrying the iPhone. While Sprint of course wound up carrying the iPhone, T-Mobile wasn’t so lucky. Indeed, word that T-Mobile wouldn’t be getting the iPhone treatment leaked out in late September, prompting T-Mobile CMO Cole Brodman to apologize to T-Mobile’s customer base on the official T-Mobile blog.

We’ve heard from many customers who love their T-Mobile service, but are disappointed that we don’t carry the iPhone. To these customers, first, thank you for your business. Please know that we think the iPhone is a great device and Apple knows that we’d like to add it to our line-up. Today, there are over a million T-Mobile customers using unlocked iPhones on our network. We are interested in offering all of our customers a no-compromise iPhone experience on our network.

That’s the power of the iPhone, friends.

As to their financials, T-Mobile’s 4Q 2011 revenue checked in at $4.57 billion, down from $4.69 billion during the same quarter a year-ago.



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