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T-Mobile flourishes in the US, wilts in Germany

Numbers up, market share down?

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T-Mobile USA has added more than a million net new subscribers in its fourth quarter, the company said today, the vast majority being post-pay subscribers. It reported annual customer base growth of 32 per cent despite a slight increase in churn rates among both post and pre-pay customers.

T-Mobile is investing heavily in the US market, where it is the fourth largest operator. US customers spend around 175 per cent as much as European phone users, and growth in Europe is much slower.

Indeed, back on home soil in Germany, a survey of analysts indicates that the company's popularity has been hit by reduced handset discounts. Bloomberg reports that even with 420,000 new domestic customers, analysts expect the competition will have taken a bite out of T-Mobile's market share.

The discount reductions part of a wider cost cutting campaign. Last week, T-Mobile announced plans to cut 2,200 jobs throughout Europe over the next two years. CEO Rene Oberman aims to reduce costs by €1bn.

The cost-cutting measures have opened the door for rival operators to come after T-Mobile's customer base, the analysts said. Boris Boehm of Nordinvest in Hamburg told Bloomberg: "Deutsche Telekom [T-Mobile's parent company] is suffering these days from very aggressive price models from competitors such as O2. If its market share goes below 35 percent, the red light will go on."

Deutsche Telekom releases detailed results on 3 March. ®

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