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Why T-Mobile’s Porting Ratios Continue to Improve

T-Mobile’s (TMUS) postpaid phone churn rate continued to decline YoY (year-over-year) during 4Q17 to 1.2%.

March 28 2018, Updated 9:02 a.m. ET

T-Mobile’s postpaid phone churn rate

Let’s look now at T-Mobile’s (TMUS) customer retention metric, or churn rate. Its postpaid phone churn rate continued to decline YoY (year-over-year) during 4Q17 to 1.2%, which was lower than the comparable figure of 1.3% in 4Q16.

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 porting ratios. He said that quarter-to-date, the porting ratio is 1.7, up from 1.68 in 4Q17. He added that it reflects the strength of the T-Mobile brand and its product offering.

The lower churn helps telecom (telecommunications) companies save on acquisition costs related to acquiring a subscriber, which, in turn, helps them expand their operating margins.

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Peer comparison of postpaid phone churn in 4Q17

In 4Q17, among the top four major US wireless service carriers, Verizon (VZ) continued to have the best postpaid phone churn rate of 0.77%. AT&T (T) had a postpaid phone churn rate of 0.89%. Sprint (S) reported a postpaid phone churn rate of 1.7% in fiscal 3Q17, which ended in December 2017.