T-Mobile US hits 21 consecutive quarters of 1mn subscription adds

Another three months have passed and yet again we are reporting about the eccentric John Legere and his unique use of punctuation cooing over 1.6 million net additions to T-Mobile US subscriber numbers.

With these new customers in the 21st consecutive quarter of at least 1 million net adds, it now takes total subscribers in the T-Mobile US grasp to 75.6 million. Total revenues are up 4% to $10.6 billion across the second quarter, while the 4G LTE network now covers now covers 323 million people, just 2 million short of the end-2018 target.

“T-Mobile just recorded its best Q2 in company history,” said John Legere, CEO of T-Mobile US. “That means 21 quarters with over one million net adds, record-high service revenues, industry-leading postpaid phone net additions, and record-low postpaid phone churn. Our business is strong, our strategy is working and we won’t stop.”

While these numbers are certainly something for the boisterous and unconventional CEO to shout about, the earnings call leaned naturally towards the much-anticipated tie up between T-Mobile US and Sprint. While the deal is working its way through the regulatory approval process in typically slug-like fashion, there are whispers in corners of the industry it may well be blocked by the watchdogs.

Fortunately for T-Mobile US, aside from scale and more efficient operational processes, it doesn’t seem to need Sprint that much. Yes, the boost to subscription numbers, the existing footprint and certain spectrum assets would be welcomed, but T-Mobile US is a company which is continuing to gather momentum on its own. The team boasted of an aggressive deployment of 600 MHz across the quarter, augmenting existing low-band capabilities on 700 MHz, while also being awarded the fastest LTE network according to Ookla, and winning 5 of 7 categories in most recent OpenSignal study.

One area of concern might be ARPU. Competitors have started to show better numbers when it comes to service revenues through increasing ARPU, while T-Mobile US improvements have come as a result of acquiring customers. At some point it will start to become prohibitively expensive to acquire new customers in the fashion investors are becoming comfortable with. Executives might start looking back at the declining ARPU, it dropped 1.2% to $46.52, as a missed opportunity. The declines being witnessed are not massive, but incrementally they will start to add up.

Period ARPU
Q2 2018 $46.52
Q1 2018 $46.66
Q4 2017 $46.38
Q3 2017 $46.93
Q2 2017 $47.01
Q1 2017 $47.53
Q4 2016 $48.37
Q3 2016 $48.15

Of course, in relation to competitors increasing ARPU numbers, Legere was as combative as you would expect:

“And let me just add a couple of things, when you really deep dive some of these ARPU changes and trajectory with the competitors, you’ve got to remember that they’re doing it by screwing the customer. Administrative fees are a huge part of what’s happening there and you’re taking that out of the pockets of existing customers.”

Irrelevant as to whether you like the colourful attitude of the CEO, or find the purposely-obnoxious presentation irritating, you can’t argue with results. T-Mobile US is continuing to gather steam and be a pain to competitors.

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