uploads///Telecom Q Prepaid Net Additions

Behind T-Mobile’s Prepaid Net Additions in 3Q17

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Nov. 17 2017, Updated 10:31 a.m. ET

T-Mobile’s prepaid net additions trend

T-Mobile’s (TMUS) prepaid subscriber growth continued to be driven by the success of the MetroPCS brand. T-Mobile added 226,000 net prepaid customers in 3Q17, down from 684,000 in 3Q16, which represents a significant YoY (year-over-year) fall.

Remember, the costs associated with prepaid customers are much lower than the expenses associated with postpaid customers, which makes prepaid customers more profitable. Acquisition expenses, maintenance costs, and upfront costs are all lower for prepaid customers.

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Peer prepaid net addition comparison

In 3Q17, AT&T (T) and Verizon Communications (VZ) added 324,000 and 139,000 net prepaid customers, respectively, while Sprint (S) gained 95,000 net prepaid subscribers during the same period.

At the end of 3Q17, Verizon’s prepaid subscriber base was the smallest at 5.6 million customers, while T-Mobile’s prepaid customer base was the largest at 20.5 million subscribers. AT&T and Sprint had 15.1 million and 8.8 million prepaid subscribers in 3Q17, respectively.

Continue to the next part for a look at T-Mobile’s postpaid phone churn rate.

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