T-Mobile’s Solid Prepaid Additions in 1Q16



T-Mobile’s prepaid customers in 1Q16

Earlier in this series, we learned about the solid growth in T-Mobile’s (TMUS) postpaid customers in 1Q16. Now let’s move to the performance of the telecom company’s prepaid component during the quarter. T-Mobile’s prepaid customers grew by ~12.5% YoY (year-over-year) to reach ~18.4 million by the end of 1Q16.

During the quarter, the carrier added ~0.81 million prepaid customers on a net basis. As you can see in the above chart, these 1Q16 net prepaid additions were significantly higher than what the company achieved during 1Q15.

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According to G. Michael Sievert, T-Mobile’s chief operating officer, “We had a record quarter on Metro PCS, the best we’ve ever done, and it really shows that we’ve got the right combination of a great value proposition well-marketed and really taking advantage of leading with the T-Mobile network as a key differentiator in the prepaid segment.”

Prepaid customers of Verizon and AT&T

Year-over-year, AT&T’s prepaid customers in the domestic wireless component grew by a significant ~21.3%, reaching ~12.2 million by the end of 1Q16. During 1Q16, the carrier had net prepaid additions of ~0.5 million in these operations.

Meanwhile, the prepaid subscribers of Verizon (VZ) decreased YoY by ~9.1% to reach ~5.4 million in 1Q16. On a net basis, the carrier lost ~0.18 million prepaid customers in 1Q16. Sprint (S) has not yet declared its results for the quarter.

Instead of direct exposures to the stocks of players in the US telecom industry, you may consider diversified exposure to this space by investing in the SPDR S&P 500 ETF (SPY). This ETF held a total of ~2.8% in some of the US telecom companies at the end of March 2016.


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