T-Mobile US continued its turnaround in the third quarter, grabbing customers from larger rivals AT&T and Verizon as its subscriber count hit 69.4 million.
Revenue and profit growth was driven by an increase in the operator’s lucrative postpaid base. T-Mobile US touted 851,000 branded postpaid phone net adds in the July to September period (a stat it claims makes it the “industry leader in net adds for the 11th consecutive quarter”), in addition to 684,000 branded prepaid net adds. Branded postpaid phone churn fell year-on-year to 1.32 per cent (compared to 1.46 per cent a year ago).
The operator claims to be the only provider to have grown both postpaid and prepaid customers for the past 13 quarters in a row.
A total of 1.97 million total net additions helped fuel a 17.8 per cent rise in total revenue, to $9.2 billion, and a 165 per cent jump in net income, to $366 million.
The results show that T-Mobile’s maverick chief executive officer, John Legere, is finding a way to balance user growth with the costs required to keep customers coming.
Number four operator Sprint last week said it is set to record a Q3 net loss of $142 million, compared with a net loss of $585 million in the year-ago period (although it benefited from a non-cash after-tax gain of $218 million related to certain spectrum swaps with other operators).
While postpaid phone net additions of 347,000 and total Sprint platform net additions of 740,000 are a long way off T-Mobile’s efforts, Sprint does at least seem to be showing a number of positive steps.
Number one US mobile operator Verizon Wireless ended the period with 113.7 million retail customers, but lost 36,000 phone customers.
Number two AT&T lost 268,000 mainstream wireless phone customers in the period, a further indication of why it feels the need to diversify away from the US wireless business via its mammoth $85 billion Time Warner acquisition.
Legere was in naturally buoyant mood. “That’s 14 quarters in a row that T-Mobile has won share from the competition,” he stated, and 14 quarters where the operator has generated more than one million net customer additions. “The Un-carrier is delivering,” he added.
The company also talked up its network development. From zero 4G coverage in 2013, it now claims to reach 99.7 per cent of the consumers that market leader Verizon covers with LTE. And 4G voice services are growing in a big way; VoLTE comprised approximately 61 per cent of total voice calls in the third quarter of 2016 compared to 16 per cent in the third quarter of 2015.
T-Mobile US claims to have built the nation’s densest, highest-capacity LTE network, with more spectrum and cell sites per customer than either Verizon or AT&T.
Looking ahead, the company expects its progress in branded postpaid phone net adds to continue, as it increased its guidance range for full year 2016 to 3.7 – 3.9 million (up from 3.4 – 3.8 million).
EBITDA forecasts were raised and narrowed, to $10.2 – $10.4 billion from $9.8 – $10.1 billion. EBITDA in the third quarter came in at $2.6 billion, up 37.8 per cent year on year.