In sharp contrast to troubled rival Sprint Nextel, T-Mobile USA Inc. said it has posted year-on-year growth with 3.6 million net new customers in 2007.

Much of the success is being credited to the myFaves service, with 5 million customers using it by yearend, as well as FlexPay.

T-Mobile's myFaves allows users to call, text, instant message and send pictures to five favorite people at any time without it going towards the minutes on their plan.

FlexPay gives customers access to nationwide long-distance calling and roaming without having to commit to a long-term service agreement.

Last quarter the German-owned carrier added 951,000 net new subscribers compared to 857,000 in the third quarter of 2007, and reduced contract churn to 1.8 percent from 2 percent in the third quarter.

Competitor Verizon Wireless reported last-quarter churn of 1.2 percent.

Compared to fourth quarter 2006, contract churn was down from 2.1 percent for T-Mobile, Deutsche Telekom's mobile phone division. Blended churn, consisting of both contract and prepay customers, was down from 2.9 percent.

In total, T-Mobile added more than 3.6 million net new customers in 2007, compared to 3.4 million in 2006. Net contract customer additions in 2007 amounted to 2.7 million.

Contract customers comprised 83 percent of T-Mobile's 28.7 million customer base at the end of 2007, compared to 84 percent in the third quarter of 2007 and 85 percent in the fourth quarter of 2006.

T-Mobile's handset offering was strengthened during the year with the debut of a number of converged devices such as the T-Mobile Shadow; the T-Mobile Sidekick iD, LX and Slide; T-Mobile Wing; and Research in Motion's BlackBerry Curve.

The company also launched its HotSpot@Home service and plan last quarter. It offers customers wireless coverage and unlimited domestic calling over Wi-Fi from home.