T-Mobile said Tuesday that its fourth-quarter loss more than doubled as the company spent more to lure in new customers.
Staff and news service reports
The company, which is controlled by Germanys Deutsche Telekom AG, added 1.65 million net new customers during the recent quarter, raising its total for the year to 4.4 million.
The quarters total included 869,000 long-term, good-credit customers. Of that number, 800,000 were related to phones and 69,000 stemmed from tablets and other kinds of mobile devices.
These postpaid customers are more lucrative and stable for wireless carriers. Elsewhere in the wireless industry, these are known as contract customers, but T-Mobile ended traditional two-year contract requirements when it introduced new pricing plans in March 2013.
Shares of T-Mobile US Inc. fell 5.7 percent, or $1.84, and closed at $30.47.
T-Mobile has been working to take customers away from larger carriers such as Verizon and AT&T. During the recent quarter, the company began offering free data and texting abroad along with a limited amount of free data each month for tablet owners.
For the current year, the company said it expects net additions of between 2 million and 3 million long-term, good-credit customers.
For the quarter ending Dec. 31, T-Mobiles loss totaled $20 million, or 3 cents per share, compared with a loss of $8 million, or 1 cent per share, in the same quarter of 2012.
Revenue increased 39 percent to $6.83 billion from $4.91 billion.
Service revenue jumped 25 percent to $5.17 billion, largely as a result of the inclusion of a full quarter of MetroPCS results, while revenue from equipment sales more than doubled to $1.58 billion.
For the full year of 2013, T-Mobile earned $35 million, or 5 cents per share, compared with a loss of $7.34 billion, or $13.70 per share, in 2012. Revenue rose to $24.42 billion from $19.72 billion.
A T-Mobile executive is scheduled to address competition in the wireless industry during a Senate Judiciary subcommittee hearing Wednesday. Thomas J. Sugrue, senior vice president of government affairs for T-Mobile, is testifying along with others, including Verizon Communications general counsel, Randal S. Milch.
Sprint officials are not set to appear, but in a statement Tuesday the company said the marketplace is not fully competitive today. Instead, it is dominated by Verizon and AT&T, which together account for 70 percent of the industrys revenues.
Sprint is committed to building the mobile broadband network of the future, but to do so we need policies that promote competition, including access to sufficient low band spectrum and reasonably-priced backhaul (service from other carriers), as well as the scale to compete cost-effectively, Sprints statement said.
The hearing comes amid reports that No. 3 Sprint is interested in pursuing a merger with No. 4 T-Mobile to form a rival closer in size to the industrys top two carriers. It has faced resistance from federal regulators and anti-trust attorneys.