T-Mobile USA says nearly one-fifth of its subscribers now use 3G-capable smartphones like the HTC HD2 and the BlackBerry Bold. The announcement came in the carrier’s second-quarter results, which were released late last night.
The carrier, a subsidiary of Deutsche Telekom, said its smartphone subscribers have more than tripled to 6.5 million over the past year and now comprise 19 percent of its subscriber base. T-Mobile had just 2.1 million smartphone subscribers in the second quarter of 2009.
T-Mobile’s smartphone ambitions have been spurred along by the carrier’s aggressive network upgrade to HSPA+, which it markets as offering 4G speeds although HSPA+ is technically a third-generation network technology.
The carrier’s HSPA+ upgrade now covers 85 million people, including major metropolitan areas such as New York City, Los Angeles and Las Vegas. The company says its network upgrades are on track to cover 185 million people by the end of the year.
In a statement, T-Mobile President and CEO Robert Dotson touted the company’s success in the smartphone arena, saying T-Mobile made it “simple and affordable” for consumers to trade up to 4G speeds.
T-Mobile’s HSPA+ prowess and success with smartphones were not enough to offset substantial declines in its prepaid business, which were exasperated by a high rate of subscriber defections, competition and lower MVNO net customer additions.
T-Mobile USA lost 199,000 prepaid subscribers in the second quarter of this year compared with the first quarter on a problematically high churn rate, which rose more than a percentage point to 7.6 percent from the first quarter. Postpaid churn held steady at 2.2 percent and the carrier added 106,000 contract customers in the second quarter.
Prepaid average revenue per user (ARPU) dipped three dollars to $18 over last year while contract ARPU remained flat year-over-year at $52.
T-Mobile’s second-quarter revenue rose slightly to $5.36 billion on sales of higher-prices smartphones and data growth. Overall, the company made $404 million, a slight dip from last year’s profit of $425 million.
