T-Mobile leads US customer growth, returns to profit

T-Mobile leads US customer growth, returns to profit

31 JUL 2014

T-Mobile US returned to profit during its second quarter, after recording the fastest customer growth of all US operators during the period. The company also announced the launch of its nationwide VoLTE service.

The US number four operator achieved 1.5 million net customer additions, meaning it passed 50 million customers during its fifth consecutive period where net additions broke the one million mark.

The company claimed to lead the industry in terms of branded postpaid phone net additions of 579,000 and reported a record number of mobile broadband net additions of 329,000, largely driven by tablet customers, five times greater than the prior quarter.

The strong net additions were partly attributed to stable postpaid phone churn, which was flat both sequentially and over the past year at 1.5 per cent.

Branded prepaid net additions stood at 102,000, which was down 363,000 compared to the seasonally-strong first quarter, but a major improvement on the 87,000 decline seen in the same period in 2013.

These figures compare favourably to the other three nationwide US operators.

Sprint, which announced its results yesterday, lost 220,000 subscribers during the second quarter, to keep its nose ahead just ahead of T-Mobile (which is an acquisition target) with 53.3 million subscribers on its platform.

US number two AT&T claimed its highest contract subscriber gains for five years for its second quarter, seeing net adds of 0.63 million.

Market leader Verizon Wireless, meanwhile, added 1.44 million retail contract customers but saw a small drop in retail prepaid subscribers.

T-Mobile recorded a net income of $391 million, the first profit it has reported since the first quarter of 2013. Total revenue was $7.2 billion, while service revenue stood at $5.5 billion.

Total revenue growth on a pro forma combined basis (following last year’s merger with MetroPCS) was 8 per cent for the period, while service revenue grew 7.1 per cent.

The subscriber growth and return to profit suggests T-Mobile’s ‘Uncarrier’ strategy – aimed at turning around its business under outspoken president and CEO John Legere (pictured) – is paying off.

In a blog post about the results, Legere said: “This company has completely transformed and changed trajectory in an insanely short time.”

Launched in 2013, the Uncarrier approach has, among other things, included an end to annual service contracts, a more flexible device upgrade policy, free international data roaming and lifetime free data allowances for tablet users.

Earlier this year it offered to reimburse consumers for early termination fees if they chose to switch to T-Mobile before the end of existing contracts with other operators.

And during the second quarter it launched Uncarrier 5.0: Test Drive, in which users can test an iPhone 5S with no obligation, and Uncarrier 6.0: Music Freedom, in which Simple Choice customers can stream music from the most popular music services without the data usage counting against their 4G data allotments.

Legere noted in his blog post that T-Mobile US has been “aggressively rolling out” Wideband LTE, upgrading its remaining 2G footprint to LTE and starting to roll out low-band 700 MHz A-Block spectrum.

“Nobody else delivers this kind of speed. No one else is capable of lighting up new network technologies like this team. We can do this, because we’re not playing the phone company utility game. We’re playing the mobile internet company game,” he said.

Author

Tim Ferguson

Tim joined Mobile World Live in August 2011 and works across all channels, with a particular focus on apps. He came to the GSMA with five years of tech journalism experience, having started his career as a reporter... More

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