Just recently, T-Mobile held its very first earnings call headed by their CEO, John Legere. Legere was happy and in good spirits and he has every reason to be. This year’s second quarter marked a milestone in the company’s history; in other words, the company grew. It stopped growing for quite a long time and this quarter’s rise is a welcome surprise.
This year saw the incredible growth of the compan y who welcomed more than 600,000 new postpaid accounts, which comes in second to Verizon’s numbers, and 300,000 new wholesale accounts that came from the company’s flourishing string of MVNOs, or mobile virtual network operators. Another reason to rejoice is the improved rate of customers who departed at 1.6% for the quarter. Legere also recognized the help T-Mobile got from Apple when they finally joined the company in April. Although Apple’s iconic phone had a hand in the overall growth of the company, only 29% of their subscribers chose the Apple handset and this includes new accounts and subscription upgrades. T-Mobile also sold almost a million iPhone units in the second quarter which Samsung Galaxy S4 followed with roughly 600,000 units sold.
Apart from Apple joining the team, Legere also attributed the company’s growth to their efforts to improve the way they charge consumers for mobile devices and services. Part of this effort was their move to eliminate phone subsidies and contracts in March, trading mobile devices on financing plans which they call the Un-carrier 1.0, and launched the Un-carrier 2.0 in July which is their Jump upgrade plan. During the event, Legere asked the audience to stay tuned for the Un-carrier 3.0 which will indicate better carrier plans for subscribers. One of T-Mobile’s lowest points is when they lost more than 10,000 prepaid subscribers but T-Mobile’s CEO is optimistic that they will be able to draw in more than the 10,000 they lost with the help of the brand new Simple Choice plans. These Simple Choice plans actually blur the line between postpaid and prepaid subscription plans. He also mentioned that the 8.9 million new prepaid accounts they got from MetroPCS is a great boost for the overall performance of the company. Adding all these numbers up will yield 10 million more connections for T-Mobile in just one quarter. The total of 44 million T-Mobile subscribers says a lot about the current stand of T-Mobile in the telecommunications industry.
The Pros and Cons of Having Millions of Subscribers
Although T-Mobile can still be considered the smallest among the four major telecoms comapnies, they can no longer be described as small. T-Mobile is currently half the size of Verizon Wireless and AT&T and is only behind Sprint which is the third largest by around 10 million subscribers. Globally, T-Mobile can actually be considered to be one of the biggest and largest carriers in the world. T-Mobile’s 44 million accounts are far bigger than France’s Orange, Germany’s Deutsche Telekom and U.K.’s Everything Everywhere. Of course, there are obvious advantages to having more subscribers, especially economically. Hosting millions of subscribers under the same network and supporting infrastructure also gives T-Mobile a higher chance at scoring exclusive device deals. They also have the machinery to convince mobile phone manufacturers to optimize the handsets under their network which gives them leverage when negotiating with other equipment dealers. Although the ultimate mission of most carriers is to draw in as many subscribers as they can, signing up millions of accounts also comes with some hurdles. The larger the number of subscribers, the faster a carrier can max out its network capacity. Choppy lines and delayed text messages may prompt most consumers to switch to more promising means of communication like VoIP and this could mean potential losses for carriers. This is probably the reason why major carriers are always on the lookout for ways to improve their services like exploring and trying new technologies like the LTE network.