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How Un-Carrier Initiatives Affect T-Mobile

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T-Mobile’s Un-carrier initiatives

T-Mobile’s (TMUS) current marketing drive is its innovative Un-carrier initiative. The company expects it to drive customer additions and help strengthen and rebuild customer trust. The next trigger for the company is its latest Un-carrier move to enter the video distribution business with the acquisition of Layer3 TV late last year. In September 2017, it launched Netflix On Us, which provides every qualifying T-Mobile ONE family plan with free access to Netflix’s (NFLX) streaming service.

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During the Morgan Stanley Technology, Media, and Telecom Conference on February 28, 2018, Braxton Carter, T-Mobile’s chief financial officer, talked about T-Mobile’s Un-carrier strategy. He highlighted that there are more Un-carrier moves to come in 2018. Management expects two Un-carrier moves per year going forward.

Carter said, “Innovation is really important because as you get ubiquity with the competitors or most of the competitors from a network standpoint, you have to continue to have significant innovation from a marketing standpoint and get much more precise with what you’re doing in order to take disproportionate share in the marketplace.”

Positive impact of Un-carrier initiatives

T-Mobile’s postpaid customer growth has significantly outpaced its competitors in the saturated US wireless space. Its postpaid customers increased a solid ~10.5% year-over-year (or YoY) to reach ~38 million at the end of 4Q17.

Sprint’s (S) postpaid customers increased ~0.8% YoY to ~31.9 million during the same period. Verizon’s (VZ) postpaid customers increased ~1.9% YoY to ~110.9 million. AT&T’s (T) postpaid customers in its combined domestic wireless operations grew ~0.1% YoY to ~77.9 million at the end of 4Q17.

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