Whether the furious T-Mobile US marketing assault will significantly shift U.S. mobile market share, and whether that shift is sustainable, is emerging as a key question for the now-feisty carrier, for the other leading mobile service providers, and for U.S. regulators who are convinced that the U.S. mobile market requires four leading national carriers to sustain innovation and competition in the market.
In one sense, T-Mobile US is succeeding. It has dramatically reversed its subscriber trend, moving rapidly from losing customers every quarter to gaining significant numbers of new subscribers every quarter.
T-Mobile US reported more than 1.6 million total net customer additions with 981,000 total branded net customer additions for the fourth quarter of 2013, including branded postpaid net additions of 869,000 and branded prepaid net additions of 112,000.
By way of comparison, Sprint added 58,000 postpaid subscribers in the first quarter of 2014. AT&T added 566,000 postpaid subscribers and Verizon added 1,573,000 postpaid subscribers.
T-Mobile US gross additions were up 15 percent quarter-over-quarter and 80 percent year-over-year.
For the full year 2013, T-Mobile added more than 4.4 million total customers and more than two million branded postpaid customers.
That all the four major carriers added those net new customers might seem paradoxical, given the nearly-saturated U.S. mobile market. Tablet net additions provide the answer. Though T-Mobile US gained primarily phone accounts, the other three big carriers added significant percentages of tablet connections.
Sprint, in its fourth quarter of 2013, added many more tablet connections than phone activations. In fact, tablet net adds were about 89 percent of total. AT&T, in the same quarter, saw 73 percent of net adds driven by tablet connections.
On the other hand, promotional activity by any service provider tends to result in lower average revenue per user (ARPU), or gross revenues, at times.
T-Mobile US ARPU dropped to $50.70 from $55.47, year over year, in the fourth quarter of 2013, for example.
So the long-term issue for T-Mobile US is probably not whether it can continue to make subscriber gains that increase its market share. The long-term issue is whether all that growth also will lead to growth with reasonable profit margins, and a long-term overall profit.
Edited by
Rory J. Thompson