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November 02, 2015

T-Mobile Holds Its Ground: Customer Retention on the Rise

T-Mobile—or the “uncarrier”, as it's come to be known for its unusual approaches to providing mobile phone service—has made a lot of major market moves lately, and that's reflected in some recent numbers the company brought out.

The most important development from T-Mobile is its rise in customer retention. The company's that subscriber growth and customer retention are on the rise, which is great news for a company whose entire market proposition is based on its subscriber count. Postpaid subscriptions were up approximately 17.3 percent against the same time last year, hitting about 30.4 million in the third quarter of 2015.

Better still, postpaid phone net additions were also up, adding around 843,000. Postpaid phone churn was up too, reaching around 1.46 percent as compared to 1.64 percent in the third quarter of 2014, meaning more subscribers are sticking around.

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But the news wasn't all good for T-Mobile, as the company saw churn elevate slightly over the previous quarters. The second quarter was around 1.3 percent, while the first quarter of 2015 was slightly lower than that, meaning churn has been progressively on the rise all year. However, no quarter was even close to the fourth quarter of 2014, the highest in the last five quarters at just over 1.7 percent. Perhaps worse yet, T-Mobile's competitors are in much better shape. Verizon's churn dropped from about one percent in the third quarter of 2014, to roughly 0.93 percent a year later. AT&T was on the rise, but still under T-Mobile's figures with about 1.16 percent, up from approximately 0.99 percent. Sprint has yet to release its numbers.

On a certain level, this is not surprising news. T-Mobile is the number three firm in the United States' mobile market, behind Verizon and AT&T, so it's reasonable that T-Mobile's churn is a bit higher than its larger competitors. But it's also clear that T-Mobile has made a lot of exciting moves lately that have fundamentally changed its place in the market. Instead of two big firms and everyone else, the top ranks are changing to include T-Mobile in the discussion. It's likely that customers are coming to appreciate T-Mobile's particular focus on customer service, something that Verizon and AT&T may not be presenting as clearly.

Still, a year in corporate terms only means so much. But what's clear is that T-Mobile is gaining on its larger competitors, and the power of customer service is on display for all to see. It may well ultimately, one day, make T-Mobile second in the field, even though that's something of a long shot.

Edited by Kyle Piscioniere

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