News

T-Mobile USA released its first half 2009 results last week.



The company's 2nd quarter operating profit increased by 1% on last year's 2nd quarter. Profit margin also increased by 1%. The company credit this increases with "focused efforts on reducing operating expenses". In practice, this meant that the company decreased performance bonuses for its retail staff, and by doing so, decreased the average cost of acquiring a customer, or "Cost Per Gross Add". Retail staff receive a low base rate of pay and often rely heavily on performance bonus, or commission, pay to supplement their incomes.



The company gained only 325,000 new customers in the 2nd quarter, down from 415,000 in the 1st quarter and 668,000 in 2nd quarter 2008.



Adding to T-Mobile's woes is the fact that new customers are more likely to opt for lower-revenue pre-paid rather than post-paid contracts - shown by an increased turnover of contract customers. Deutsche Telekom's US subsidiary is having trouble building high revenue returns due to the fact that its networks do not support sophisticated handsets like the iPhone, unlike its competitors AT&T and Verizon Wireless.