What You Can Expect from T-Mobile's 1Q17 Earnings

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Part 4
What You Can Expect from T-Mobile's 1Q17 Earnings PART 4 OF 8

T-Mobile’s Postpaid Net Additions: Gauging the Outcome in 1Q17

T-Mobile’s postpaid phone net additions in 1Q17

In this part of our series, we’ll look at the kind of postpaid phone net additions we can expect from T-Mobile (TMUS) in 1Q17. Barron’s reported the following on April 4, 2017: “We’re slightly lowering our first-quarter postpaid net add number for T-Mobile to 850,000 (from 897,000 prior) to account for several factors…Our 850,000 estimate includes 714,000 postpaid phone net adds and 136,000 tablet net adds.”

The reported cited the following as key reasons for this action:

  • a softer gross-add environment in the quarter
  • a delayed tax refund season
  • the Samsung Galaxy launch being pushed into the second quarter

T-Mobile&#8217;s Postpaid Net Additions: Gauging the Outcome in 1Q17

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In 4Q16, the strong momentum at T-Mobile showed no signs of slowing down, with 933,000 postpaid phone net additions—up from 851,000 in 3Q16. For the 12th consecutive quarter, the company held strong as the industry leader in postpaid phone net additions.

These results were positively influenced by its T-Mobile ONE plan, the launch of Apple’s (AAPL) iPhone 7, and higher gross additions from holiday promotional activity.

Peer comparison

Major wireless carriers in the US will continue to face pressure on postpaid phone volumes in coming years, given the increasingly competitive market. By comparison, postpaid phone net additions by Verizon Communications (VZ) reached 167,000 in 4Q16, whereas AT&T (T) actually suffered a loss of 67,000 postpaid phone subscribers in 4Q16. Meanwhile, the postpaid phone net additions by Sprint (S) reached 368,000 in fiscal 3Q16 (quarter ending December 2016).

Notably, postpaid phone users—especially the smartphone users—are of particular value for mobile carriers. Users of smartphones such as Google’s (GOOG) Android or Apple’s iPhone tend to have relatively high data usage, and so they’re the most lucrative customers for telecom companies.

Continue to the next part for a look at T-Mobile’s prepaid net additions.


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