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With the introduction of mobile broadband services and the release of the first Android-powered handset, T-Mobile continued its steady pace of subscriber growth.
The company finished 2008 with about 32.8 million customers, adding more than 4 million new subscribers. About 2.9 million of these came from organic growth, and 1.1 million came from the $2.4 billion acquisition of SunCom Wireless. This is moderate growth from the 3.6 million new subscribers the carrier gained in 2007.
Part of the growth comes from the rollout of the high-speed UMTS/HSDPA network, for which the company spent more than $4 billion to acquire the spectrum in an FCC auction. The 3G network enables customers to browse the Web faster, and potentially opens the door for services such as streaming audio and video on demand.
Of course, a high-speed mobile broadband network is useless if there are no handsets to take advantage of it, and T-Mobile got a big boost from being the exclusive carrier of the G1. This was the first handset to feature Google's Android mobile operating system, and it has sold well. The Samsung Behold and the Sony Ericsson TM506 have also been popular with customers, T-Mobile said, and both can take advantage of the 3G network.
"2008 was a milestone year for T-Mobile in positioning the company for future success," said Robert Dotson, T-Mobile USA's president and CEO, in a statement. "We continued to generate new channels for growth by launching high-speed wireless data service to the masses, and offering customers innovation that adds real value to their lives."
T-Mobile may be concerned about the rate at which subscribers leave, known as churn rate, because its overall churn rate for the fourth quarter rose to 3.3% from 2.8% the year before. The carrier said the increased rate is due to increased competition and the anniversary of many of its customers' two-year contracts.
The fourth-largest wireless carrier has a way to go if it hopes to catch up with the industry leaders. Verizon Wireless has more than 80 million subscribers following its acquisition of Alltel, and AT&T has nearly 74 million wireless customers and the industry's hottest smartphone, Apple's iPhone 3G.
Despite having more than 50 million subscribers, Sprint may be vulnerable. The third-largest U.S. cellular provider continues to bleed subscribers, and it has posted more than $1.1 billion in net losses for the year.