t-mobile phone store JeepersMedia

In the United States, the cell phone industry is one of the hardest duopolies to break. AT&T and Verizon have secured around 75% of the smartphone market. Yet, T-Mobile has done just about the impossible and shown remarkable growth in 2013 and promise for 2014.

At the end of 2012, T-Mobile was down 9.8% and coming off their worst point of revenue growth along with being the only major company not offering the iPhone. Fast forward one year and T-Mobile has grown 8.5% to approximately 46.7 million customers. To put that in perspective, you will not find any other company growing that much in the same time frame. In fact, AT&T has been hovering at the 4% mark, Verizon around 8%, while Sprint is staying at approximately 0.5%. So, while other mobile companies had service revenue staying stagnant, T-Mobile showed positive results.

T-Mobile did it by ending early-termination fees for those switching to another carrier, allowing users to upgrade their smartphone anytime they want (in their “Jump” plan”) and with their Value Plans. Even with revenue increases of 10.3% to $6.83 billion, T-Mobile has received a mild response from Wall Street which had multiple agencies predicting revenues above $6.90 billion.

Either way, T-Mobile’s customer growth was fantastic with a reported 1.6 million net customer additions in the fourth quarter and gross customer additions up 80 percent in 2013. If we include the acquisition of MetroPCS Communications, T-Mobile added 4.4 million total customers in the fourth quarter of 2013. Citigroup’s Michael Rollins has noted that because T-Mobile had added 1.65 million subscribers in the Q4 of 2013, it was their “best branded postpaid performance in eight years,” at 869,000 net additions.

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By the way, does anyone remember the doomsday scenarios that AT&T and their paid minions stated would occur if T-Mobile didn’t merge with AT&T under the $39 billion dollar deal?

Customers will be harmed and needed investment will be stifled.” – AT&T after their announcement that the merger with T-Mobile was dead”

Well, this week we learned that T-Mobile’s valuation has been recently raised to around $49 billion. Funny what happens when a company actually invests in improving their network and rethinks their strategy in the wireless marketplace.

  • Victor Who

    I wonder what the overall total net worth of the company is. Revenue is definitely high, but what about the expense/investments? Good old fashion supply-side economics: strengthen and increase product supply and lower costs. They key is the network. I am ready to jump ship, but the network is key. I can’t trust my family’s welfare (on the road) with a shoddy network. T-Mobile is making a dent in the industry but not a major impact yet. I am waiting for that huge impact, better network,….then I’ll switch.

    • John Garlits

      I think you’re right. They can only grow so much with the current network. I’m lucky to live in an area where it works for me, but there are many for which it’s just a no go. It will be interesting to see how well and how quickly they can build it out.

      • smokebomb

        Their current network has plenty of bandwidth available. I get 70 down and 30 up. What they need to do is expand coverage, not increase speed.

        • newkai

          Yep, they are in lacking in so-called low frequency bandwidth. Similar to AM radio vs. FM radio, the low-band bandwidth covers large areas but isn’t particularly fast. Verizon and AT&T own most of this but hopefully T-Mobile will get their hand on it soon. Their mid-band spectrum is excellent, which is what gets you that great speed in cities.

    • Guest123

      actually, their network “on the road” isn’t the problem. T-mobile, like everyone else, follows major roads with their networks. It’s when you go off those major roads.

  • John Garlits

    I recently switched and am happy. For what I used to pay at Verizon, I get more data, an LG G2 for zero down on the JUMP program which includes full insurance and Lookout Premium, the ability to upgrade every 6 months, no possibility of overages on talk or text (I don’t do much, but I sometimes use a bunch in one month, usually the holidays). That and I can anytime if I don’t like it. Basically, I have freedom. It’s true the coverage is not as strong, but at work, for example, I can use WiFi calling to fill the gap. But the more people join, the more money they’ll have to invest in the network, which they’re doing. In my usual areas, I get as good coverage as I got with Verizon, which wasn’t always as good as they’d like to claim and had a dead spot in a commercial shopping area ironically near where they have a big store.

    • Peerpressure

      I did the same. Also got the G2. The wifi calling is really cool. I actually turn off my data and just use wifi, and i don’t miss a call or text, unlike on AT&T. (i turn off my data because my phone is weird. Not sure if it’s just my phone or a G2 issue. If I have data on, and I’m on wifi, then sometimes my wifi network cuts out because it is “temporarily avoiding a weak connection”. And I just start using data. Not fun when I listen to pandora all day on my phone).

      Back to T-mobile– I love the fact that they’re increasing everyone’s data, free of charge. I have 500 MB now, getting another 500MB in a few days. Now I will have double the data that AT&T gave me on shared mobile, and I pay less.

      • John Garlits

        The WiFi disconnect issue sounds like maybe the connection is just weak enough for it to choose the cellular data instead. I think you can turn that off in the WiFi advanced settings. Uncheck “Wifi signal weak.” Maybe that will do the trick for you if you don’t want to keep cellular data totally disconnected (or have to remember to turn it on and off – which you could automate with other apps like Llama or something, but I digress).

        Wow, I didn’t realize they were adding on extra data! With T-Mobile, the surprises are actually good?! My friend is still with them and went to check out Verizon’s “More/2X data” promotion, and it turns out she’s getting nothing extra after reading the fine print. I remember how my bill at VZ gradually/mysteriously grew over time as well, maybe government fees though. Used to have the their crippled GNex as well with all the delayed software updates. I’m sure they were pushing me to get frustrated and upgrade, locking in again to another 2 years. My patience has paid off. I have the 2.5 GB plan currently, and I also stream music most of the time, Play Music in my case. Haven’t had an issue with going over, though I do go over 1 GB every month, so I don’t think it’s quite enough for me to bump down. Should be handy having the extra 500 MB for times when I need it though.

        • Peerpressure

          That was one of the first things I did, uncheck the weak wifi signal box. Still have the issue. If I forget, and turn on data without turning off wifi, I’ll have to turn off data, turn off wifi, and then turn wifi back on for it to work again. Super weird.

          But not annoying enough to see about a replacement. Just quirky. I work half a mile from my house, so I’m almost constantly on wifi. :)

      • John Garlits

        Just noticed on their website their unlimited plan may be going away? “Sign up today! Unlimited 4G LTE data with 2.5GB of 4G tethering is only available until March 23!” Almost makes me want to do a quick switch, though I’m really not sure if I’d use it. Hmm…

        • Guest123

          They are increasing prices and data on plans. The $70 unlimited is now being limited and replaced with an $80 unlimited plan; however, anyone on the $70 unlimited will be grandfathered.

  • They’ve done very well, and will continue to grow. 2014-2015 is the time where will see major network improvements, and people will continue to join the T-Mobile family.

    Everyone knows that T-Mobile has the best pricing. Now all they have to do is continue to invest in their network, and they will be on top in no time.

  • smokebomb

    What’s more amazing is the other 3 carriers’ attempts at competing are mediocre and still don’t resemble anything close to customer friendly.

  • Guest123

    I’ve only used T-Mobile over the years. Never had an issue, customer service has always been good to me.

    However, their coverage is not that great. Sure, if you are in the right areas you can get great speeds for data, but move a mile off a main road and you are on slow 3G, and possibly edge. Maybe they’ll get their more penetrating bands pushed out this year.

  • mrmessma

    I’m not a verizon fan, but they’ve grown virtually the same as T-Mobile. (8% vs 8.5%) “T-Mobile has grown 8.5% to approximately 46.7 million customers. To put that in perspective, you will not find any other company growing that much in the same time frame. In fact, AT&T has been hovering at the 4% mark, Verizon around 8%, while Sprint is staying at approximately 0.5%.”
    When you take into account what is 8% growth for a company the size of Verizon and 8.5% growth for a place the size of T-Mobile, it’s not such a lush picture.

    • Robert F

      I do hate Verizon but I fully agree with you, Verizons growth is more substantial then T-Mobiles. Either way T-Mobiles growth is still impressive.

    • William Neilson Jr.

      I agree that Verizon staying around 8% is impressive but from where T-Mobile was last year and this year….it is amazing to me.

      T-Mobile no doubt has issues going forward but the losses can be overcome with subscribers and network investment.

  • Fred Chiang

    is that the derivative graph lol

    • Robert F

      The only way I can tell AT&T and Sprint apart is because Sprint is going down. It’s a great graph though haha. /s

      • THatch

        Sprint and Verizon also use different connection technology than the rest of the world. If they don’t change that and get more customer friendly plans, they are headed for the pooper.

  • Christof Schumann

    t-mobile is of german heritage. Maybe they should focus on this issue in marketing. Vorsprung durch Technik…. DAS PHONE…etc….

  • So is the most dynamic and feisty of the bunch, T-Mobile, formally being sold to the most clueless, Sprint, or not? It was a big news story months ago, but nothing lately – even in stories about their performance and prospects….

    And if T-M’s going gangbusters (and I believe the subscriber and growth data’s accurate) and have an innovative management with a real plan (which seems at least plausible, and Legere’s way entertaining if nothing else) , why is their German parent so helll-bent on getting rid of them….

    Is it that the growth in customers is at the expense of $$ losses as far as the analysts’ eyes think they can see??

  • Michael Samsara

    A heads up for those who live in NYC.

    The Laptop website http://blog.laptopmag.com/fastest-4g-nyc

    did a comparison of 4G LTE between Verizon, T-Mobile, AT&T and Sprint. The article was very well put together – EXCEPT for the omission of one little detail that made the claim that Verizon was the fastest download – not exactly true.

    The test was conducted all over the city from top to bottom – consistently – see the link – Verizon came way out ahead on download speeds. T-Mobile was 2nd followed by AT&T and then Sprint dead last.

    Sounds like Verizon is the best of the best – which is what the article claimed – until

    you read to the end of the article and see that what you were thinking was so – wasn’t. All of the phones except Verizon’s were standard 4G LTE but Verizon’s was a unit equipped with AWS (Advanced Wireless Services = faster)

    Quote from article:

    “To be clear, our testing represents a moment in time, and other carriers could up their game soon. Also note that Verizon’s great speed advantage applies only to smartphones that support its AWS technology. Right now, that’s about 30 percent of the device lineup,…”

    So, what the article did was compare apples to oranges. and doesn’t really even represent the speed most Verizon customers are getting – since only 30 percent of their phone line us is AWS compatible and the only way you would be getting the reported, touted speeds would be if you had been lucky enough to have bought one of those 30 percent of their phones that happen to have it.

    What would have been very interesting and informative and truly fair to all parties concerned – rather than obviously opening all of us up – as it did for me – to making a false conclusion that the article was actually comparing everyone on the same, level playing field, would have been to have included BOTH a regular Verizon 4G LTE and the AWS versions and then given us a true comparison – rather than one that was from the get go slanted in Verizon’s favor.

  • maximuslyricus

    If you get good reception in the places that you frequent on the outside, and have access to WiFi on the inside, then T-mobile offers the best value for those who can’t afford to be virtually strong-armed by Verizon and AT&T.

    Once upon a time, Sears and K-mart took their customers for granted. When Wal-Mart came on the scene, they were barely a blip on the radar. Now, because they listened to the pulse of the market, they are leaders of the market. T-mobile has its finger on the pulse of the market, and one day its going to pay off in spades by sheer volume. If T-mo continues to recognize that they can ultimately be profitable and successful by keeping their business transparent and fair to the consumer, T-mo will continue to grow by leaps and bounds. There is something to be said by being willing to accept modest profitability to keep customers consistent and happy, as opposed to trying to make fat hogs even fatter to your consumer’s detriment.