Last in JD Powers wasn’t the beginning or the end of T-Mobile’s downward spiral, Q2 report shows big Loss

As an ex-tmobile employee, I hate to see the company suffer, but at the same time I can say I saw this coming years ago. Not that a call center rep has any say in the matter. The 7 call center closures, including the one here where I used to work, was anticipated by us locals for about a year and a half. It made perfect business sense to close out non profitable call centers. Yes, inbound call centers do make money, but we won’t go into detail on that. Then came in the latest JD Powers failure that put T-Mobile at the bottom of the pack, again, something employees and ex-employees within the last 3 years saw coming too. Now on to the Q2 reports from T-Mobile, more bleak news of course.

No surprise, T-mobile has been losing customers for a while, with Q2 losses of contracted customers coming in at 557,000. Ya, that is over half a million customers in 90 days. Tmo blames a chunk of the loss on a tightened credit policy and older devices phasing out. They did however net 227,000 prepaid customers, which is triple from the same quarter last year.

As for profits, they hit $207 million which is a dip from the $212 million last year. Service revenues hit the same mark as last quarter at $4.4 billion, but is still 5.2% lower than last year.

My mind likes to take this information and ponder some reasons. The last few years have been incredibly hard on many people and families. Losing homes, cars being reposed, medical bills that can’t be paid, banks nailing people left and right. It makes sense to me that pre-paid is on the rise if a carrier tightens their credit requirements and forces huge deposits for accounts. If memory serves me, its like $250 per line. It is less expensive to go pre-paid and have no contract and no outlandish deposits either. I am also not convinced that old devices being phased out makes much sense as a reason for contract customers declining. If the numbers reflect current customer who are off contract that aren’t upgrading as well as the lack of new customers then we need to talk numbers and separate the two. With people fearful of job loss, piling up bills and ‘cutting out the fat’ from their lives to survive, pre-paid makes sense, and so does not signing another contract that you are unsure if you can pay. Network is another consideration. When you end up somewhere where you don’t have service but everyone else around you does, can quickly lead you to migrate to another provider.

This issue doesn’t stop with T-Mobile though. Sprint has difficulties and so do Verizon and AT&T. The cell industry is a tough business. T-mobile is going to be fighting an uphill battle for a few more years. We just hope they can keep trucking along and turn this around before it is too late and they are forced to sell or close up shop.

Via Electronista