T-Mobile US enjoys stellar subscriber growth but profits suffer

T-Mobile US enjoys stellar subscriber growth but profits suffer

02 MAY 2014

Customers are flocking to T-Mobile US, attracted by its new offers and service promotions, but the self-styled ‘uncarrier’ is paying a heavy price as quarterly profits take a kicking.

In the first three months of the year, T-Mobile US raked in another 2.4 million customers. Of that number, 1.8 million were ‘branded’ (the remainder being wholesale customers).

And among the net additions were 1.3 million new monthly subscribers (branded). That’s more postpaid customers than the big two – Verizon Wireless and AT&T – managed to attract combined.

T-Mobile US, the fourth-largest mobile operator in the US, now has a subscriber base exceeding 49 million.

Revenues for the period, compared with Q1 2013, leapt 47 per cent to $6.88 billion (helped by the inclusion of MetroPCS results in Q1 2014).

On a pro forma combined basis, total Q1 2014 revenues were still up 15.3 per cent, year-on-year, boosted by higher equipment sales and growth in service revenues.

Fuelling subscriber growth, however, has taken its toll on the bottom line. T-Mobile US posted a Q1 net loss of $151 million (compared to a $107 million profit in the same quarter last year).

John Legere (pictured), T-Mobile US CEO, nonetheless appears undaunted. “A year ago I promised that we would bring change to what I called this arrogant US wireless industry,” he said. “We are delivering on that promise and our results reflect the growing customer revolution that we’ve ignited.”

And yesterday Legere tweeted: “The first year of uncarrier was amazing, but it’s going to pale in comparison to what’s next!”

Bloomberg reported earlier this week that Sprint, the third-largest operator in the US, is planning to make a bid for T-Mobile US in June or July having previously met with banks to discuss funding for an offer.

Author

Ken Wieland

Ken has been part of the MWC Mobile World Daily editorial team for the last three years, and is now contributing regularly to Mobile World Live. He has been a telecoms journalist for over 15 years, which includes eight...More

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