Deutsche Telekom subsidiary T-Mobile US is feeling the effects of fierce competition on the American market.

The number of new contract customers rose by 927,000 in the fourth quarter, as the Deutsche Telekom subsidiary announced on Wednesday. However, turnover shrank by 2.5 percent and, at 20.27 billion dollars, fell short of the market expectation of 20.6 billion dollars. Adjusted operating profit (EBITDA) increased by around eight percent to 6.8 billion dollars in the fourth quarter.

The US subsidiary has repeatedly proven to be a growth driver for the Bonn-based group and has recently raised its forecasts twice in succession. However, T-Mobile US is feeling the competition from its larger rivals AT&T and Verizon, which are luring customers with high discounts. This has given T-Mobile a monthly churn rate of 0.92 percent, one of the highest in the industry. The two competitors have rates of 0.84 and 0.89 percent respectively.

On this basis, T-Mobile was cautious about customer growth. Five to 5.5 million users are expected to be added in 2023, following an increase of 6.4 million in the previous year. However, analysts were not put off by this outlook. The company usually starts a year conservatively and gradually raises its forecasts in the following months. Adjusted for the income from the expiring equipment leasing business, T-Mobile expects a profit of 28.7 to 29.2 billion dollars. In relation to the average, this is an increase of ten percent.

Irrespective of this, the mobile operator initially provided no new information on the financial consequences of the recent data leak. Hackers had stolen the personal data of possibly 37 million customers. Around two years ago, thieves stole information on an estimated 76.6 million customers. As a result, the company had to pay a fine of 350 million dollars and invest a further 150 million dollars in improved cyber security.

(Report by Eva Mathews; written by Hakan Ersen, edited by Hans Seidenstücker. If you have any queries, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)