T-Mobile has been given the boot from national electronics retailer RadioShack in favor of the much bigger wireless provider, Verizon Wireless.
RadioShack is phasing out T-Mobile and bringing in Verizon in an attempt to turn around its slumping sales. The retailer announced second quarter earnings recently and it wasn't pretty. The company's revenue of $941.9 million was down from $962.3 million last year. Net income was even worse at $24.9 million, or $0.24 per diluted share compared with $53.0 million, or $0.41 per diluted share.
The company's operated store segment, its main source of revenue, was down 8.7 percent from last year. Mobility sales in particular were down 7.1 percent, even as the company has drifted away from general electronics sales to focus on mobility. Weak sales from T-Mobile and Sprint Nextel impacted the revenue.
With 106.3 million devices connected to its network, Verizon is the largest wireless provider in the U.S. T-Mobile is fourth and is pending F.C.C. approval; it will become a part of AT&T's network in 2012 for $39 billion.
"This is a substantial win for our customers, as this relationship with the nation's largest wireless provider will further enhance our position as a leading multi-carrier wireless retailer. The addition of Verizon Wireless, in combination with our existing carrier partners, positions us to now offer the best assortment of carriers, rate plans, devices and accessories for every consumer need," Jim Gooch, president and chief executive officer of RadioShack Corporation, said in a statement.
In the second quarter earnings release, Gooch blamed the company's poor performance on transitioning T-Mobile out and transitioning Verizon in. On September 14, T-Mobile products will be phased out permanently. The very next day, RadioShack will be offering Verizon products.
T-Mobile responded to the dumping by announcing it was going to reveal new channels for its distribution soon. These channels, the company said, would double the number of RadioShack locations that offered its products.
"After careful consideration, we decided that to in order to increase the effectiveness of our retail network and in line with our sales strategy," a T-Mobile spokesperson said.
Follow Gabriel Perna on Twitter at @GabrielSPerna