T-Mobile’s UnCarrier Campaign still Generating Significant Growth

by Matt Klassen on October 28, 2015

Say what you will about the long-term viability of T-Mobile’s aggressive UnCarrier promotional campaigns over the last year or so, the company has struck a chord with consumers and as the company’s Q3 2015 results show, the momentum created by its cut-throat marketing continues unabated, with subscribers still flocking to its wireless service.

In fact, the company has for months now been gaining new subscribers faster than all of its major competitors combined, attracting 2.3 million new subscribers overall during Q3, the tenth quarter now in a row the company has added more than 1 million customers.

Not everything went T-Mobile’s way in the earnings call, however, as America’s third largest wireless carrier posted lower than expected revenues and profits, due to unexpected costs associated with subsidiary MetroPCS, higher than expected tax revenues, and, of course, the costs associated with undercutting all its competition. But on the whole T-Mobile showed yet again that its momentum is holding firm, and despite what its competitors have long said, that its UnCarrier campaign is sustainable.

Over the last 36 months or so T-Mobile has shown an uncanny ability to disrupt a largely stagnant wireless market through a unique blend of promotions easy on the wallet, a dash of marketing panache, and company CEO John Legere’s own edgy attitude, complete with a “pinch of profanity.”

That disruption continued in the third quarter of 2015, as T-Mobile reported earlier this week that it added 843,000 smartphone customers, part of the 2.3 million total customers it added for the quarter.

By comparison, Verizon added only 430,000 net new phone customers during the quarter, while for its part, AT&T lost 333,000. Sprint has yet to post its results, but it would need to add 746,000 phone customers to keep T-Mobile from once again outpacing all three national carriers combined for quarterly growth.

It should also be noted that despite many analysts’ predictions, T-Mobile’s ongoing UnCarrier campaign has started to reap financial rewards for the company as well, as the company posted a profit for the second consecutive quarter, earning $138 million on revenue of $7.8 billion, compared to a loss during the same quarter last year.

T-Mobile CEO John Legere said in a statement: “Our momentum is strong and our incredible customer growth is translating directly into solid financial growth which makes it crystal clear that putting customers first is just good business.

But despite these strong gains T-Mobile fell short of Wall Streets predictions, as analysts estimated that the company would record upwards of $8.29 billion in revenue. The company attributed the missed projections to the costs associated with dismantling the legacy CDMA network of subsidiary MetroPCS, an expensive project in the short term designed to free up spectrum the company is planning to repurpose for its continued 4G LTE network expansion.

“That performance is not what investors expected,” says tech analyst Jeff Kagan. “This is the first real disappointment from T-Mobile in a while. Ten years ago every wireless carrier tried to win every customer. Today T-Mobile seems to be focused on slices rather than the whole pie.”

While this is clear evidence that you can’t win them all, T-Mobile’s UnCarrier revolution is winning where it needs to, attracting a torrent of customers from all the other major national carriers with promises of budget-friendly, user-friendly plans…things the likes of Verizon and AT&T have long forgotten.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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