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T-Mobile added more than 1 million subscribers last quarter
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T-Mobile wrapped up the first quarter of 2017 with a strong performance, according to the company's earnings call on Monday.
The nation’s third-largest telecom added 1.1 million new customers and generated $9.6 billion in revenue, representing an 11% growth over the $8.6 billion it saw in revenue in Q1 2016. Here are the top-line items from the call:
T-Mobile gained 914,000 postpaid and 386,000 prepaid customers in the quarter, helping to bump the total count of T-Mobile subscribers to 55.54 million at the close of Q1.
T-Mobile estimates that it captured over 250% of subscriber growth in the postpaid phone market during the quarter. Of T-Mobile's postpaid additions, 798,000 were postpaid phone additions, positioning the company favorably compared to Verizon, which posted a loss of 289,000 postpaid phone customers in the quarter, and AT&T, which lost 348,000.
This growth is leading to sustained positive porting ratios and record-low churn rates for T-Mobile. T-Mobile’s customer additions came from all major competitors in the US; T-Mobile had a positive porting ratio against Verizon, AT&T, and Sprint for the fourth straight year. A positive porting ratio indicates that T-Mobile gained more subscribers from its competitors than it lost to them. This resulted in a record-low postpaid subscriber churn rate of 1.18%.
T-Mobile’s sustained growth is a result of two major feats:
First, the network operator has significantly improved wireless service quality in recent years. Verizon has historically positioned itself as offering superior coverage to T-Mobile. However, OpenSignal recently reported T-Mobile's and Verizon's network speeds as comparable.
Second, its consumer-friendly offerings — like its unlimited data plan, its promotional pricing, and its zero-rated services — are appealing to consumers. T-Mobile launched its "Un-Carrier" initiative, which offers consumer-friendly policies such as no overage fees for data, the elimination of contracts, and unlimited plans, in Q1 2013. While T-Mobile's subscriber count was on a downward trend when the initiative was launched, the company has seen 76% growth in postpaid subscribers since starting the program.
T-Mobile’s strong results signal that customers are coming to prioritize services like those offered in T-Mobile's "Un-Carrier" initiative. While an unlimited data plan offering is a significant selling point for consumers, it's not a distinct value proposition for T-Mobile; all four major US telecoms offered unlimited data plans as of Q1. This indicates that consumers may be coming to the No. 3 US telecom for one of its other Un-Carrier offerings, like its zero-rated services such as Binge On that enables consumers to stream video for free without counting against their data allotments, and carry over data plans that let consumers save unused data.
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