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.
“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.