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T-Mobile Not Feeling Pretty in Pink as AT&T Merger Drags On

Posted by Mark J. Miller on August 9, 2011 10:00 AM

You have to feel for T-Mobile — it's no fun being in limbo.

While AT&T's proposed merger with T-Mobile US is winding its way through the requisite regulatory hoops, Sprint is taking advantage of the situation by releasing a new campaign (check it out below) that spoofs T-Mobile's pretty-in-pink spokesmodel in order to promote its Virgin Mobile prepaid brand.

Sprint's spot claims that T-Mobile US customers are "contractually obligated" to stay with Mr. AT&T, but a T-Mobile spokesperson tells AllThingsD that the lookalike ads (featuring Virgin Mobile's fake celebucouple, "Sparah") are not only "flattering" but proof that T-mobile’s no-contract plans are putting pressure on Virgin, and that "consumers will see right through their gimmicks."

T-Mobile, meanwhile, appears to be bleeding money and subscribers while waiting for the merger to be finalized.

Last year, before T-Mobile USA has been listed as a discontinued operation by its parent company Deutsche Telekom, it lost 93,000 subscribers in the second quarter. Now that it has had that label all year and its merger with AT&T seemingly in a limbo land, you’d think the second quarter of this year would have brought even more of an exodus. However, BetaNews reports that the company only lost 50,000 subscribers in the second quarter of this year.

The company’s net revenue for the quarter was $5.1 billion, down from $5.2 billion in the same quarter last year. However, in the first quarter of 2011, T-Mobile lost 99,000 subscribers. Ouch.

“While contract churn continues to be high, we are focused on upgrading our customers to higher quality products and concentrating on retaining our loyal customers," said Philipp Humm, President and CEO of T-Mobile USA. 

In Europe, meanwhile, T-Mobile reportedly lost subscribers in Poland, where it had invested in a rebranding effort early this year, according to the Warsaw Business Journal.

“Since taking over Era operator Polish Telefonia Cyfrowa (PTC) in January 2011, Deutsche Telekom, operator of the T-Mobile network, has been losing both money and clients,” the WBJ reports.

One piece of good news for the company, though, is that “two Republicans on the Senate Judiciary Committee’s Antitrust Subcommittee signaled their support for AT&T’s proposed acquisition of T-Mobile in a letter” to the FCC and Justice Department Wednesday, according to MainJustice.com.

“Based on the evidence available to the Subcommittee, there are a number of reasons why a merger between AT&T and T-Mobile may prove to be a positive step along the path to world-class wireless broadband throughout the United States,” Sens. Mike Lee of Utah and John Cornyn of Texas wrote, according to the site. “Some of this evidence suggests that the merger would provide significant and immediate efficiencies enabling enhanced service quality, expanded network capacity and increased data speeds.”

Meanwhile, for AT&T and T-Mobile, their merger plans are still on hold.

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