T-Mobile’s Subscriber Growth Story Continues in 3Q15



T-Mobile’s subscribers

In the last part of this series, we learned about what T-Mobile (TMUS) may be looking for in a potential acquisition or partnership. For a prospective acquirer, T-Mobile brings a solid subscriber growth story in a saturated US wireless market. The carrier has been able to consistently add postpaid customers and, more importantly, postpaid phone customers.

This is particularly important considering the sizeable differential between T-Mobile’s cumulative performance in this metric since 2013 and that of each of the other three players among the top four US wireless carriers. These wireless carriers are AT&T (T), Verizon (VZ), and Sprint (S).

During the Deutsche Bank Leveraged Finance Conference held on September 30, 2015, J. Braxton Carter, T-Mobile’s chief financial officer, talked about customer additions in 3Q15.

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He said, “We disclosed…that at that point in the quarter, we had already surpassed the momentum that we achieved in total in Q2 and I think very importantly had almost a tripling of our prepaid nets at that point. Certainly, that momentum doesn’t stop overnight. We’ve done much better since then, and you’ll see our results at the end of the month.”

T-Mobile’s subscribers in 2Q15

The wireless carrier continued to grow its postpaid phone base even in 2Q15. T-Mobile’s postpaid customers increased ~19.5% YoY (year-over-year) to reach ~29.3 million at the end of the quarter.

The company’s postpaid phone users increased by ~16.8% YoY to ~27.6 million in 2Q15. In terms of net additions of customers during the quarter, the company added 760,000 postpaid phone subscribers and 248,000 mobile broadband customers.

T-Mobile’s prepaid customers increased ~5.9% YoY to reach ~16.6 million at the end of the quarter. In terms of net additions of prepaid customers during 2Q15, the company added 178,000 subscribers.

Instead of taking direct exposure to T-Mobile’s stock, you may consider taking diversified exposure to the telecommunication company by investing in the iShares U.S. Telecommunications ETF (IYZ). The ETF had ~5.8% of its holdings in T-Mobile at the end of August 2015.


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