How Big Can T-Mobile US Grow in a Year?

It seems implausible that T-Mobile US, with 49 million customers, could reach 75 million subscribers in 12 months, as T-Mobile US CEO John Legere suggests T-Mobile US will do. 

That would require adding about 26 million net new subscribers, about 6.5 million a quarter, something no mobile service provider has done since 2008. 

Of course, tracking subscriber share has gotten considerably more complicated, recently. There always is an important difference between postpaid and prepaid accounts. Now it also appears net subscriber growth is being driven by tablets, not phones. 

That is significant because average revenue per device is going to be lower than if the new additions were phone accounts. 

On the other hand, any rapid acceleration of T-Mobile US subscriber growth is going to add one more key element to any evaluation of the merits of a Sprint effort to acquire T-Mobile US. 

Right now, the concern, at both the Federal Communications Commission and the U.S. Department of Justice, is that the U.S. mobile market is too concentrated already. 

But there is only one thing that would convince antitrust authorities that the U.S. market is growing more competitive: a significant loss of market share by either Verizon or AT&T, or both. 

So far, T-Mobile US gains have not dented net growth at AT&T or Verizon, but principally because net additions are driven by tablet connections. If that is the case, T-Mobile US might actually be taking share from all the other three service providers.

So T-Mobile US subscriber growth gains might tend to convince regulators that T-Mobile US needs to remain independent, to continue innovating. Under other circumstances, Softbank might have been expected to launch blistering marketing attacks of its own.

But T-Mobile US might have usurped that role, or at least made it much tougher for Sprint to revamp its offers and prices. 

Indeed, Softbank CEO Maysaoshi Son seems to acknowledge that Sprint organic growth will be tough, in the event it does not grow by acquiring T-Mobile US. 

Under other circumstances an eventually bigger T-Mobile US might consider buying Sprint, especially if Sprint continues to lose customers. 

But Deutsche Telekom already has signaled it wishes to exit the U.S. market. Even if it could afford to do so, DT does not want to buy Sprint. It wants to leave the U.S. market.

So, that increases the chances that Sprint could try something dramatic, such as offering to give T-Mobile US leadership the reins of any new company, with other concessions that tend to ensure T-Mobile US policies will be extended across Sprint.

Those sorts of policies would be difficult to craft, and it is unlikely the provisions could be made enforceable for more than a few years. But T-Mobile now is doing what many observers expect a Softbank-controlled Sprint would have done, in any case.

The line of argument would be to “make Sprint bigger so that the T-Mobile US assault can intensify.” How to ensure Sprint would continue to behave as aggressively as T-Mobile US after three to five years is the issue.