T-Mobile’s Un-carrier 11
T-Mobile (TMUS), the fastest-growing US wireless carrier among the top four, has started its new effort called Un-carrier 11 to attract and retain customers. The top four US wireless players include Verizon (VZ), AT&T (T), and Sprint (S).
According to T-Mobile, for select postpaid phone users, it’s “offering a FULL share of T-Mobile US [TMUS] common stock to millions of existing and new customers.” As per the company, “Customers can grow their ownership up to 100 shares a year by doing what they’re already doing—recommending T-Mobile.”
Additionally, “T-Mobile’s giving those who’ve been with the Un-carrier for five or more years TWO full shares of T-Mobile stock for each recommendation until 2017.”
Also, “the Un-carrier announced T-Mobile Tuesdays, a new app that thanks T-Mobile customers with free stuff and epic prizes, every Tuesday.”
T-Mobile’s customer retention
T-Mobile’s new initiative may positively impact its customer retention, at least to some extent. The carrier’s postpaid churn metric remains higher than those of the top two US mobile players, Verizon and AT&T.
During 1Q16, Verizon continued to have the lowest postpaid churn among the top four US wireless companies, at ~0.96%. AT&T followed Verizon with a postpaid churn of ~1.1% in its domestic operations in 1Q16. Meanwhile, T-Mobile had a postpaid phone churn metric of ~1.3% for the quarter, and Sprint’s postpaid phone churn figure was at ~1.6% during the same period.
Instead of taking direct exposure to T-Mobile’s stock, you may consider taking diversified exposure to the telecommunications company by investing in the PowerShares QQQ Trust, Series 1 ETF (QQQ). The ETF held ~0.7% in TMUS at the end of May 2016.