Wednesday, 22 February 2017

T-Mobile US revenues, earnings rise on strong net adds

By Nick Wood, Total Telecom
Tuesday 14 February 17

Operator ends 2016 with more than 71 million subscribers; hits back at rival Verizon's new unlimited tariff.

T-Mobile US chief executive John Legere on Tuesday pledged to continue his self-styled 'Un-carrier' revolution in 2017, after the operator reported healthy fourth quarter and full year results. T-Mobile added 2.10 million customers during the three months to 31 December 2016, of which, 933,000 were branded postpaid phone customers. In the same quarter a year ago, the company added 917,000 branded postpaid phone customers…

T-Mobile US chief executive John Legere on Tuesday pledged to continue his self-styled 'Un-carrier' revolution in 2017, after the operator reported healthy fourth quarter and full year results.

T-Mobile added 2.10 million customers during the three months to 31 December 2016, of which, 933,000 were branded postpaid phone customers. In the same quarter a year ago, the company added 917,000 branded postpaid phone customers, and 2.06 million customers in total.

Its subscriber base now stands at 71.46 million, up from 63.28 million at the end of 2015.

"That's three years in a row that we've added more than 8 million customers and taken all of the postpaid phone growth in the industry," Legere said. "The competition just doesn't get that customers want to come first."

T-Mobile's results were published a day after rival Verizon launched its first unlimited price plan since 2011.

Verizon Unlimited does actually come with a fair usage policy (FUP) of 22 GB of LTE data per billing cycle. Once that allotment has been used, customers will find their connection speed slows, and that Verizon will prioritise other customers' data traffic.

Verizon Unlimited also offers HD video streaming, 10 GB per month of 4G mobile hotspot data, free voice and text roaming to Mexico and Canada, and 500 MB per day of LTE roaming in those countries as well. It costs $80 (€75.53) per month for a single line, or $45 per line on a four-line family plan.

T-Mobile, which continued to offer unlimited plans during Verizon's six-year hiatus, hit back immediately, by adding a few bells and whistles to its own unlimited tariff, T-Mobile ONE.

The extras, available at no additional charge, include HD video streaming, and 10 GB of 4G mobile hotspot data. In terms of prices, a single line costs $75 per month including taxes and fees, or $100 per month for two lines. A four line package costs $160 per month.

The one-upmanship comes as a recent network report from OpenSignal revealed that T-Mobile's LTE network matches Verizon's in terms of speed, and almost matches it for coverage.

Legere said T-Mobile's rise has led Verizon to cave in to offering unlimited tariffs.

Verizon "just lost their network advantage, and they know it…and more importantly, more and more customers know it. Their back's against the wall," he said. "This what the Un-carrier does – drag the carriers kicking and screaming into the future."

Back to T-Mobile's results, and the company reported a 10.51% year-on-year increase in Q4 service revenue, which came in at $7.25 billion (€6.83 billion). Operating expenses grew to $9.23 billion from $7.41 billion, while operating income rose to $942 million from $838 million. Net income attributable to shareholders came in at $376 million, compared to $283 million a year ago.

For the full year, service revenue surged to $27.84 billion from $24.82 billion. Operating expenses were $33.44 billion, up from $29.99 billion in 2015, and operating income jumped to $3.80 billion from $2.07 billion. Full year net income rocketed to $1.41 billion from $678 million.

"These results are proof that doing right by customers is also good for shareholders," Legere said. "Not only are customers flocking to T-Mobile, but we're also producing rock-solid financial results."

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