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Uncarrier strategy helps T-Mobile add another million customers to its books

Uncarrier strategy helps T-Mobile add another million customers to its books


Unfortunately new customers don't equal profit, yet

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T-Mobile has just announced its Q3 financial results, and they represent a dramatic improvement in fortunes. Compared to last year's third quarter, when the carrier dropped 492,000 postpaid customers, T-Mobile added 643,000. Postpaid are by far the most valuable customers to T-Mobile, so retaining existing customers while adding new ones is important.

Average revenue per user (ARPU), a figure that defines how much each user is worth to the company, raised year over year from $42.78 to $52.20, but that represents a second consecutive quarterly drop. When compared to recent results the pickings may look slim — the company added more subscribers in the previous quarter — but those figures were inflated by the amalgamation of MetroPCS' business into T-Mobile's anyway.

The last two quarters represent a sudden shift for T-Mobile. After quarter upon quarter of negative postpaid subscriber numbers, the "Uncarrier" appears to now be steadily growing back its previous size; so much so that it's adjusted its outlook for 2013 as a whole, predicting it'll now add 1.6 to 1.8 million postpaid customers, up more than 50 percent from the previous estimate of 1 to 1.2 million. T-Mobile is yet to turn the improved subscription figures into significant profitability, as it posted a small net loss of $36 million on $6.69 billion revenue. That's a significant improvement year over year, no doubt, but there's plenty more work to be done before T-Mobile's transformation is complete.

Update: On its earnings call, T-Mobile addressed iPhone sales during its first time carrying the device on launch day. T-Mobile CMO Michael Sievert said that iPhones accounted for 15 percent of its 5.6 million device sales this quarter, but that it could have been an even higher percentage had supplies not been so short.

T-Mobile CEO John Legere also took the opportunity to trash talk industry competitors, saying that his company was seeing positive results "as we continue to change this stupid, arrogant industry." He otherwise reiterated that he felt this quarter showed that the "Uncarrier" initiative was working: "My main takeaway from this quarter ... is that our Uncarrier strategy is working, momentum continues, and we're working diligently to make sure that it doesn’t stop."