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T-Mobile Adds 1.1 Million New Customers

NEW YORK (TheStreet) -- T-Mobile's (TMUS) new "Un-carrier" service pricing strategy appears to be working. The company reported second-quarter results that showed increases in both new subscribers and revenue.

The No. 4 U.S. cellular carrier said it attracted 1.1 million new customers including 685,000 contract subscribers in the second quarter. That's an improvement of 1.3 million net additions from the year-earlier second quarter; T-Mobile lost 557,000 customers in the same quarter last year.

T-Mobile said it was able to keep "postpaid churn" (customers not renewing contracts) to its lowest level ever at only 1.58%. It also benefited from the additional pre-paid customers gained with the completion of the MetroPCS merger.

The carrier reported second-quarter revenue of $6.23 billion, up from $4.9 billion one year ago and beating Wall Street expectations of $6.01 billion. With its change to lower cost monthly plans, T-Mobile wound-up posting a loss of $16 million compared to last year's second-quarter profit of $207 million.

T-Mobile shares were down 0.21% to $24.91 in early trading Thursday.

For the full year of 2013, T-Mobile is projecting adjusted EBITDA on a pro forma combined basis, including MetroPCS results for the full year, to be in the range of $5.2 to $5.4 billion.

Back in March, T-Mobile announced its "Simple Choice" rate plan separating monthly service charges from the actual cost of purchasing handsets. In the past quarter, the carrier sold a 4.3 million new smartphones which account for 86% of its total cell phone sales. That's up from 71% in the previous quarter.

A big part of the smartphone sales boost comes from the addition of Apple (AAPL) phone models. T-Mobile reported the iPhone accounted for 29% of its total handset sales. The new Samsung Galaxy S 4 Android phone was also added during the quarter.

T-Mobile's LTE services continue its roll-out across the country with the company reporting its high-speed 4G footprint now includes 116 metro areas and covers more than 150 million people.

--Written by Gary Krakow in New York.

>To submit a news tip, send an email to: tips@thestreet.com.

Gary Krakow is TheStreet's senior technology correspondent.

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