Skip to main content

T-Mobile growing faster than its rivals combined, but at a steep cost

T-Mobile growing faster than its rivals combined, but at a steep cost

Share this story

T-Mobile's Uncarrier strategy is working. Over the past year, the fourth-placed carrier has seen subscriber growth skyrocket, and now claims it's America's "fastest growing wireless company." Over the past four quarters, net additions have reached almost 6.2 million. That's around 2.7 million more than AT&T managed, and 1.7 million more than Verizon. Its growth over the most recent quarter also reached record highs, with almost 2.4 million subscribers added in the past three months alone, more than AT&T and Verizon combined.

Despite its rapid growth, T-Mobile is still massively behind its larger rivals. Including commercial customers and MVNOs, the carrier has just over 49 million subscribers, and just 23.6 million of those are on its postpaid services. AT&T and Verizon both have over 100 million total subscribers. Struggling third-place carrier Sprint, which is currently attempting to merge with T-Mobile, has been hemorrhaging customers, and should current trends continue, T-Mobile will surpass its potential partner in total subscribers within the next two quarters.

Adding 6 million subscribers in 12 months has unsurprisingly changed T-Mobile's financial situation significantly. Revenues are up 47 percent from last year, but growth has come at a price. The company has now posted losses in four consecutive quarters, and those losses grew to a high of $120 million in the most recent. That's a cause for concern — it implies T-Mobile can't continue to compete aggressively without incurring further losses — but that's the ultimate cost of its "Uncarrier" methods of expansion.

"A short-term trade worth making."

With a potential acquisition by Sprint's owner looking ever more likely, T-Mobile is prioritizing growth over profits. It's behaving like a startup, forcing its more established rivals to change their plans in reaction to disruptive ideas and marketing. For the next quarter at least, it's going to continue to focus on growth. That strategy will work for now, but if an acquisition or merger doesn't materialize, T-Mobile admits it may need to adjust its game plan. On a call this morning, T-Mobile CEO John Legere told investors the company was increasing its estimate for yearly additions, and reducing its estimate for yearly earnings, calling the focus on growth over profits "a short-term trade worth making."