T-Mobile US on top despite falling customer growth

The mobile operator was the third of the big three US telcos to post full-year and quarterly financials late last week and its numbers show that, once again, it is ahead of the curve, in terms of customer base, at least.

As has become the norm, T-Mobile was particularly keen to crow about its postpaid mobile customer addition metrics. Overall postpaid net adds came in at 5.7 million last year, buoyed by a 1.6 million uplift in the fourth quarter, while postpaid phone net adds clocked in at 3.1 million for the full year on the back of 934,000 net adds in Q4.

Those are "industry-leading customer results," said T-Mobile US CEO Mike Sievert, as part of a broader comment extolling the virtues of the telco and its all round brilliance.

He's got a point though. AT&T recorded 526,000 postpaid phone net adds in the fourth quarter and 1.7 million for the full year, which is only just over half of T-Mobile's total. And Verizon, which did its best to obfuscate its numbers, posted 449,000 postpaid phone net adds in Q4, but only 430,000 for the full year. That's some way off the pace.

T-Mobile did not draw attention to the fact that its net adds have fallen by some way over the past 12 months; it didn't need to, given how well it is performing compared with its peers. But the fact is that those numbers are falling – as are AT&T's, while Verizon's growth is from a much lower base – and the telco expects them to continue to do so.

Its outlook for 2024 puts postpaid net customer additions at between 5 million and 5.5 million, a figure that T-Mobile expects will see it "lead the industry for the 10th consecutive year." However, it is below the aforementioned 5.7 million it brought in last year, which was itself down on the 6.4 million it posted in 2022.

That said, the guidance range is the same as T-Mobile started with in 2023, company CFO Peter Osvaldik pointed out on the telco's earnings call, according to a transcript posted on its website. The slightly muted figure reflects the firm's focus on profitable growth, he said, although it is "expecting total industry net additions to moderate."

Interestingly, the operator also expects slower growth on the fixed wireless side this year and beyond.

5G-based FWA has been a big push for T-Mobile over the past couple of years; earlier this month it announced a deal to deploy Nokia's Multi-Access Gateway solution to enable it to scale up the service.

As of end-2023 T-Mobile's FWA customer base reached 4.8 million. Q4 net adds came in at 541,000, which was slightly down on Q3, but essentially in line with its trend of adding north of half a million FWA customers per quarter.

Going forward Osvaldik expects net adds for the high-speed Internet product to be in the 400,000 range, which will leave the telco on track to meet its 7 million-8 million customer base target by the end of 2025, he said. The lower net adds expectation is due to "some of the promotional pricing that we've now pared back," Osvaldik said; essentially, the product has gone mainstream and prices have gone up accordingly.

Verizon's quarterlies also included a positive comment on FWA. The rival telco noted that it is on course to hit its goal of 4 million-5 million customers by the same date, its net adds in Q4 having come in at 375,000, taking its overall total to 3 million.

Sievert declared T-Mobile "one of the largest ISPs in the nation," thanks to its FWA customer base, which might seem a bit premature, given that there are cablecos with tens of millions of customers and AT&T and Verizon with much heftier fibre bases. However, FWA is growing consistently, where other forms of fixed broadband are not, and is starting to emerge as a serious contender in the US market.