Unstrung grades T-Mobile International on its performance in 2007

Michelle Donegan

March 10, 2008

3 Min Read
Carrier Scorecard: T-Mobile

Recent news from T-Mobile International AG shows that the operator wants to be at the forefront of mobile technology developments including home base stations, 4G broadband standard LTE, Google (Nasdaq: GOOG)'s Android, and the mobile Internet. (See T-Mobile Invests in Femto Firm, T-Mobile Demos LTE, T-Mob Preps Android Launch, and T-Mobile, Yahoo Partner.)

But how is the operator performing today? Now that the dust has settled following the full-year 2007 results from T-Mobile's parent Deutsche Telekom AG (NYSE: DT), Unstrung can take a closer look at the mobile operator and grade its performance for the year. (See DT Reports 2007.)

The last time we graded T-Mobile, we gave the operator a "B" because of the strong growth it recorded at T-Mobile US Inc. and T-Mobile (UK) , which balanced out falling revenues in Germany. So how did the operator perform in 2007? (See Carrier Scorecard: T-Mobile, Carrier Scorecard: T-Mobile International, and Carrier Scorecard: T-Mobile.)

The basic figures show that the operator's subscriber base totals 119.6 million at the end of 2007, which is a 10.3 percent increase from the end of 2006. T-Mobile's full-year 2007 revenues were up 8.4 percent to €34.7 billion (US$53.2 billion), but the operating profit was down 1.1 percent to €4.4 billion ($6.7 billion). (See Table 1.)

{Table 1}

Average revenue per user (ARPU) for the group in 2007 was down 1.6 percent compared to 2006. For the fourth quarter, though, group ARPU was down 5 percent, compared to the fourth quarter 2006.

T-Mobile is making headway in data services. The operator's non-messaging data revenue was up 40 percent to €1.9 billion ($2.9 billion) in 2007, which represents 5 percent of the total revenue. The operator also reported 3.2 million "web'n'walk" mobile Internet users at the end of 2007, which is a 71 percent increase from the previous year.

In general, T-Mobile's non-voice ARPU (which includes messaging) hovers around 20 percent to 21 percent of ARPU in its European markets, and it gradually increased during 2007.

For example, in Germany, non-voice ARPU was 21 percent of ARPU in the fourth quarter 2007, which is up 2 percent from the fourth quarter in 2006. In the U.S., non-voice ARPU was 16 percent of ARPU in the fourth quarter, which is a 3 percent increase from the fourth quarter in 2006.

T-Mobile also got a data usage boost in Germany from Apple Inc. (Nasdaq: AAPL)'s iPhone. The operator has sold 70,000 iPhones with contracts and says that the average Internet usage for an iPhone customer is more than 100 Mbytes, which is 30 times the use of the operator's average contract-based consumer customers. (See iPhone Data Booms at T-Mobile.)

T-Mobile needs this kind of boost in its home market. In 2007, the operator increased revenues year-on-year in all of its markets, except for Germany where fierce price competition persists. Full-year 2007 revenues in Germany were down 2.7 percent to €8 billion ($12.2 billion), compared to 2006 revenues. Even though the operator grew its customer base by 14.5 percent to 35.9 million in the country, it was not enough to offset the effect of falling prices.

Outside Germany, growth is clearly driven by T-Mobile USA. The subscriber base grew 14.6 percent in 2007 to 28.6 million customers. The acquisition of SunCom Wireless Inc. will increase its customer base and improve coverage there too. (See Table 2 and T-Mobile to Buy SunCom for $2.4B.)

{Table 2}

More acquisitions could be in store for T-Mobile as the company reiterated its strategy to grow its international mobile business when it reported full-year results. The operator is looking at the potential to consolidate in markets where it already operates or make acquisitions where it doesn't. (See DT Goes Double Dutch for $1.9B.)

Given the progress T-Mobile has made on mobile Internet services, the growth in data service revenue, and the good subscriber growth, we're upgrading the operator to a B+.

— Michelle Donegan, European Editor, Unstrung

About the Author(s)

Michelle Donegan

Michelle Donegan is an independent technology writer who has covered the communications industry for the last 20 years on both sides of the Pond. Her career began in Chicago in 1993 when Telephony magazine launched an international title, aptly named Global Telephony. Since then, she has upped sticks (as they say) to the UK and has written for various publications including Communications Week International, Total Telecom and, most recently, Light Reading.  

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like