In the third quarter, T-Mobile added 1.06 million customers, continuing its momentum as the fastest-growing carrier in the U.S. and put the finishing touches on its EDGE network rollout.

Now with 20.3 million subscribers, T-Mobile is still less than half the size of the other Tier I providers, but the company has grown its subscriber base by more than 5% every quarter for the last few years. T-Mobile saw its financial performance increase accordingly, posting $3.8 billion in revenues, up 25% from the third quarter of last year. Its net income increased 80% year-over-year to $458 million.

T-Mobile’s growth, however, may be coming at the expense of its higher-dollar post-paid customers. Of the 1.06 million net adds 339,000 or 32% were pre-paid customers, which generate less than half of the revenues of contract customers. The proportion of pre-paid customers on T-Mobile’s network has been increasing steadily over the last 12 months, from 11% a year ago, to 13% in the second quarter to 14% last quarter. Average revenue per user (ARPU) for a pre-paid customer has also been falling steadily, from $28 to $24 a month year-over-year, while post-paid monthly ARPU has held at about $55 a subscriber. Consequently T-Mobile’s overall ARPU has fallen 3.6% to $53 year-over-year. Churn, however, improved slightly over the same period, falling from 3.0% to 2.9%.

On the data side, T-Mobile has more than 95% of its GSM footprint upgraded with EDGE, a high-speed data technology that offers speeds around 100 kb/s, triple that of GPRS. T-Mobile, however, hasn’t planned any grand launch around the new network like Verizon Wireless and Sprint have done for their 3G EV-DO services. Instead, the carrier has been quietly offering the enhanced data capabilities to its customers for no additional charge, a T-Mobile spokesman said. T-Mobile now has four EDGE handsets, and the spokesman said most new handsets would support the technology.

T-Mobile has not announced any plans for a migration to 3G, though the other carriers are actively rolling out EV-DO and UMTS networks. T-Mobile, however, may not need the capacity boost. It reported post-paid data ARPUs of $4.84 or 8.8% of its total service revenues. That puts T-Mobile on par with Sprint, which is the oft-acknowledged leader in data services in the U.S., though Sprint’s data ARPUs took a hit last quarter falling below 10% last quarter after its absorbed Nextel’s less robust data operations. A year ago, T-Mobile’s data ARPU was at 5.6% of total revenues, and T-Mobile attributed much of the growth to new BlackBerry users, which now total 662,000.

T-Mobile continued to be the fast growing subsidiary in the Deutsche Telekom Group, accounting for half of all of the T-Mobile operators 2.2 million net adds. T-Mobile USA is now the second largest wireless operator in the group, second only to T-Mobile Germany.