T-Mobile Gains Customers, Advances on Competition | Cannon Group | Your trusted experts in telecom management.
A Breakdown of Big Telecom Mergers
May 22, 2014
U.S. Carriers Race to Launch VoLTE
June 3, 2014

T-Mobile Gains Customers, Advances on Competition

T-Mobile Gains Customers, Advances on Competition

No. 4 T-Mobile Pressures Competitors, Despite Heavy Losses in Q1

May 27, 2014

In the continuing saga of T-Mobile fighting to break away from the typical carrier mold, the No. 4 U.S. wireless carrier is seeing more payoffs from its innovative “UnCarrier” strategy in 2014.

1Q14 carrier earnings results for T-Mobile paint an interesting picture: 2.4 million new customers (including 1.3 million postpaid subscribers) – marking its fourth consecutive quarter with more than 1 million net additions. It’s also the first time that T-Mobile has ever surpassed 2 million net additions.

But there are costs for every success. That’s why, despite its successes, T-Mobile sustained $151 million in losses in Q1.

 

The Big Picture for T-Mobile

These Q1 losses translate to about 19 cents a share, mostly from increased promotional efforts, compared to a $106 million profit at 20 cents a share last year, according to Q1 2013 carrier earnings.

However in early Q2 of this year, T-Mobile’s shares were up 7.5 percent to $31.50* in early market trading.

It’s a result of the aforementioned net additions, as well as the revenue surge from closing last year’s merger between T-Mobile and MetroPCS pairing T-Mobile’s 34 million subscribers with the near 9 million from MetroPCS.†

Finalizing the T-Mobile and MetroPCS merger made a definite impact on revenue this past quarter: Q1 saw a 47 percent increase to $6.9 billion (28 percent of which came from MetroPCS), in addition to an increase of 465K prepaid customers* (again, thanks largely to efforts from MetroPCS).

 

Making its Presence Heard Throughout the Market

T-Mobile Gains Customers, Advances on CompetitionT-Mobile’s efforts promoting “UnCarrier” as well as its LTE performance (see: T-Mobile has fastest LTE network in the U.S.) are certainly affecting the rest of the carrier market.

Looking at Q1 carrier earnings from 2014, it’s clear that T-Mobile’s competitors (No. 3 Sprint and No. 2 Verizon) are starting to feel the pressure of T-Mobile’s movements. It seems that only No. 1 AT&T is high enough to escape the rising tide – for now.

So far in 2014, T-Mobile advances toward a total of 50 million customers, with plans to add 2.8 to 3.3 million branded contract customers* by the end of the year.

These numbers continue to bring the “UnCarrier” closer to potential merger partner Sprint, which ended the first quarter with 54 million customers.

Which begs the all-important question: Whether it’s a result of T-Mobile’s progress in expanding LTE or its “UnCarrier” approach, could it be that T-Mobile’s revolutionary strategy is working?

 
——————————————————————
 

* Reedy, Sarah. T-Mobile Sacrifices Costs for Customers, Light Reading. Light Reading.
† Welch, Chris. T-Mobile and MetroPCS merger finalized, company to begin trading as ‘T-Mobile US’, The Verge. Vox Media, Inc.


Subscribe to our blog

Sign up to receive a monthly rundown of our blog posts!