Prepaid customer growth of T-Mobile and its key peers in 4Q15

In an earlier part of this series, we observed that T-Mobile (TMUS), as per preliminary figures by the company, reported much higher growth in postpaid subscribers among the top four US wireless carriers in 4Q15. These wireless carriers include Verizon (VZ), AT&T (T), and Sprint (S). As per T-Mobile’s preliminary figures, its postpaid base grew by a robust ~16.6% YoY (or year-over-year) during the quarter. Now let’s look at the performance of T-Mobile’s prepaid component as well as the prepaid components of its key peers in 4Q15.

How Was T-Mobile’s Prepaid Customer Growth in 4Q15?

Among the top four US wireless players, the prepaid subscribers of T-Mobile and AT&T grew YoY in 4Q15.

During the quarter, T-Mobile’s prepaid subscribers increased robustly by ~8.1% YoY to reach ~17.6 million. Meanwhile, AT&T’s prepaid subscribers in the domestic wireless component grew YoY by a significant ~15.9% to ~11.5 million by the end of 4Q15.

Verizon and Sprint’s prepaid subscribers fell YoY by ~9% and ~3.3%, respectively, in 4Q15. By the end of the quarter, Verizon and Sprint had ~5.6 million and ~14.7 million prepaid wireless subscribers, respectively.

Prepaid net additions of T-Mobile in 4Q15

As per the company’s preliminary figures, on a net basis, T-Mobile added ~469,000 prepaid customers in 4Q15. T-Mobile’s prepaid net additions increased ~76.3% YoY in 4Q15. Earlier in 3Q15, the carrier’s net prepaid additions were ~595,000.

Instead of direct exposures to US telecom companies, you can consider getting diversified exposure to the space by investing in the Technology Select Sector SPDR Fund (XLK). The ETF had invested ~10.5% of its holdings in US telecom companies at the end of December 2015.

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